The Senate Says Pre-Paid Tuition Plans Should Become Tax-Free
(Washington, D.C.) U.S. Senator Jeff Sessions (R-AL) announced today that the U.S. Senate has adopted the Sessions' Sense of the Senate amendment supporting the CLASS Act, the Collegiate Learning And Student Savings Act of 1999. Sessions' CLASS Act calls for tax- free treatment for all pre-paid college tuition plans. Currently 39 states, including Alabama, have pre-paid college tuition plans. This amendment was adopted by voice vote during consideration of the annual Budget Resolution.
The amendment, adopted by unanimous consent says:
It is the sense of the Senate that the levels in this resolution and legislation enacted pursuant to this resolution assume that additional tax incentives should be provided for educational savings, including---
(1) excluding from gross income distributions from qualified State tuition plans; and (2) providing a tax deferral for private prepaid tuition plans in.
"The CLASS Act provides incentives for savings rather than bureaucratic solutions," Sessions said. "For a small cost, the CLASS Act will provide billions in potential savings to help families afford a college education."
The Sessions' CLASS Act is expected to be included in tax reduction proposals considered later this year by the Senate Finance Committee. Identical legislation, H.R. 254, offered by Rep. Joe Scarborough (R-FL) is moving through the House of Representatives.
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