Joint Committee on Taxation
May 19, 1999
DESCRIPTION OF MODIFICATION TO CHAIRMAN'S MARK
OF PROPOSALS RELATING TO EDUCATION INCENTIVES
The Senate Committee on Finance has scheduled a markup on May 19, 1999, on various education tax incentives in an original bill, entitled the "Affordable Education Act of 1999." A description of the Chairman's Mark is contained in Description of Chairman's Mark of Proposals Relating to Education Incentives (JCX-20-99), May 17, 1999.
Under the modification, a taxpayer would be permitted to claim a HOPE or Lifetime Learning credit for a taxable year and receive an exclusion from gross income for amounts distributed (both the principal and earnings portions) from an education individual retirement account and/or from a qualified tuition program on behalf of the same student in the same year as long as the distributions are not used for the same expenses for which a credit was claimed. This modification would be effective for distributions made during the period January 1, 2000, through December 31, 2003.
Under the modification, the exclusion for employer-provided education assistance, as applied to both graduate and undergraduate education, would be extended through courses beginning on or before June 30, 2004.(1)
1. The Description of Chairman's Mark of Proposals Relating to Education Incentives (JCX-20-99), May 17, 1999, at p. 11 under the heading "Effective Date," incorrectly states that the Chairman's Mark would extend the exclusion for graduate-level courses to courses beginning after January 1, 2000, and before June 1, 2004. The effective date is correctly stated, at p. 11 under the "Description of Proposal," as graduate-level courses beginning after January 1, 2000, and before January 1, 2004.