Dec. 21, 2006
President Bush signed on Dec. 20 the Tax Relief and Health Care Act of 2006 (H.R. 6111), which extends the tuition tax deduction and the research and development tax credit. Both credits expired at the end of 2005.
H.R. 6111—a package of tax extenders, health savings account changes, and other tax breaks—was passed by Congress just before it adjourned on Dec. 9.
The tuition tax deduction allows people who earn $65,000 or less a year ($130,000 for married couples filing joint returns) to deduct up to $4,000 in higher education expenses and those earning $65,000 to $80,000 ($130,000 to $160,000 for married couples) to deduct up to $2,000.
“To keep America competitive in the world economy, we must make sure our people have the skills they need for the jobs of the 21st century. Many of those jobs are going to require college, so we're extending the deductibility of tuition and higher education expenses to help more Americans go to college so we can compete,” the president said in remarks at the signing ceremony.
Because the extension occurred so late in the year, the already-printed 2006 tax forms do not include a line for the tuition deduction. The Internal Revenue Service will publish new instructions for taxpayers wishing to claim the deduction this year and will update its web site to include the deduction.
