Emanuel, Chicago Educators Urge Chicagoans to Take Advantage of Higher Education Tax Deductions & Credits BEFORE Filing Taxes April 15th

CHICAGO, IL.—With April 15th a week away, U.S. Representative Rahm Emanuel (D-IL) is working to help families save money by taking advantage of higher education tax credits and deductions.
 
Emanuel was joined by Dr. Wayne D. Watson, Chancellor, City Colleges of Chicago; John Wozniak, Harold Washington College Interim President; Sulema Perez, legislative liaison for Northeastern Illinois University; Charles Guengerich, Wright College President, and Northwestern graduate student Keith Wilkins at a press conference today to draw attention to the higher education tax deductions and credits families can claim.
 
“Thousands of Chicago families are eligible for these credits and deductions, but they’re not taking advantage of them,” Emanuel said.  “I have one thing to say to families who are struggling to send their kids to college as well as students and parents who’ve gone back to school:  ‘Look for lines 26 & 47 on your 1040.’  That’s where you can find the Tuition and Fees Deduction and the Education Credits.  It may be worth thousands of dollars in tax savings to you.”

Emanuel used large charts to illustrate which lines on the IRS 1040 Form filers should use to take advantage of the deduction and credits.

According to Harvard Graduate School of Education professor Bridget Terry Long’s 2003 report “The Impact of Federal Tax Credits for Higher Education Expenses,” only 29.4 percent of students eligible for a tax credit based on their income, attendance status, and tuition payments benefited from one.  That means nearly 70% failed to claim a tax break.  Overall, only one third of households knew about the education tax credits and deductions.

52% of Illinois households* are eligible to take advantage of Education Credits and Tuition and Fees Deduction, according to the U.S. Census Bureau & IRS Data.  At the press conference, Emanuel highlighted three opportunities families can claim:

1st Opportunity:  The Tuition and Fees Deduction is a targeted deduction of up to $3,000 for 2003 taxes.  The deduction will increase to $4,000 for 2004 and 2005.  This deduction can be taken by individuals with incomes up to $65,000 ($130,000 for joint returns).  2.9 million (2,921,208 million) Illinois households earned below $65,000.

2nd Opportunity:  Families may be able to claim a Hope Credit of up to $1,500 for qualified tuition and related expenses paid for each eligible student.  In addition to meeting other requirements, this credit can be taken if income is less than $51,000 ($102,000 if filing a joint return).  2.4 million (2,444,738 million) Illinois households earned below $50,000.

3rd Opportunity:  The Lifetime Learning Credit may allow families to claim up to $2,000 for qualified tuition and related expenses paid for all students enrolled in eligible educational institutions.  In addition to other requirements, this credit can be taken if income is less than $51,000 ($102,000 if filing a joint return).  2.4 million (2,444,738 million) Illinois households earned below $50,000.

The Chicago educators spoke about how tax credits and deductions have helped many of their students make college more affordable.

“In 2000, almost 350,000 Illinois tax filers claimed higher education tax credits.  Many of these same people could be eligible for the Tuition and Fees Deduction,” Emanuel said.  “These are just a few of the tax savings opportunities available to families.”

Last week, Emanuel reached out to 5th Congressional District families via a taped telephone message urging them take advantage of education tax deductions and credits.  Over 400 Chicagoans requested more information on how to take advantage of these tax benefits for education.
 
Also, Emanuel’s office has been hosting free tax preparation services provided by the Tax Assistance Program, a non-profit service authorized by the IRS, for the last three months.  The services are provided by the Tax Assistance Program’s trained volunteers for families with incomes of $35,000 or below.  The final tax clinic will be this Saturday, April 10 from 8:30–11:30 a.m. in Congressman Emanuel’s District Office. 
 
“Higher education tax credits and other benefits can return thousands of dollars to eligible families.  I urge them to take advantage of these benefits, which can help put higher education a little more within reach,” Emanuel said.
 
The complete IRS information guide on tax benefits for education is available at http://www.irs.gov/pub/irs-pdf/p970.pdf or by calling the IRS toll free at 1-800-TAX-FORM
(1-800-829-3676).

*Note: Households include families and individuals