Dear Marietta College Colleagues,
You may have heard that the new $1.5 trillion tax plan being discussed and voted on today in Congress included proposals targeting higher education. Many of the major higher education provisions of the bill that would have negatively affected higher education have been eliminated.
I am pleased to share with you that these proposals — as well as a few others regarding higher education — will not be a part of the final tax package that Congress presents to the President for his signature.
I have spoken with Rep. Bill Johnson (R-Marietta), and he has assured me that he is working hard to make sure these are not included in the final tax plan.
The provisions directly affecting higher education that will remain the same are:
- The new law will continue the tax exemption for tuition assistance (tuition remission) for employees and dependents;
- Graduate student tuition waivers will continue to be excluded from taxable income;
- Individuals may continue to deduct interest on qualified education loans;
- Dependent care flexible spending accounts of up to $5,000 per year will continue to be excluded; and
- The interest of private activity bonds to assist in financing construction projects will remain excluded from taxable income.
The provisions that will change, many of which will not impact Marietta College directly are:
- There will be a 1.4% excise tax on private college and university assets valued at $500,000 per FTE student. Marietta College would have to have more than a $500,000,000 endowment for this to have an impact. Although we would like that to have that size of an endowment, we will work hard on growing to that level;
- The new bill eliminates the 80% charitable deduction for amounts paid for the right to purchase tickets for athletic events. Again, no change at Marietta College; and
- There is a provision that imposes an excise tax of 21% on compensation over $1,000,000 paid by tax-exempt organizations to the five highest compensated employees. Again, no change at Marietta College.
I promise to keep you updated on any relevant updates that could affect the College, the tuition remission programs, or any other programs that we currently offer.
Many thanks for ALL you do for Marietta College and have a safe and enjoyable Holiday Season!
President and Professor of Management