Washington — Senate leaders have reached agreement on a bill to renew a trio of tax benefits important to colleges. The Senate is expected to take up the measure later this week. The benefits, which expired in 2007, are:
A research-and-development tax credit for businesses. The 20-percent credit would apply to corporate cash expenses, including grants or contributions, that finance basic research at universities.
An above-the-line tuition deduction. The provision would allow individuals who earn $65,000 or less a year ($130,000 for couples filing joint returns) to deduct up to $4,000 in higher-education expenses. For those who earn $65,000 to $80,000 ($130,000 to $160,000 for married couples), the maximum deduction would be $2,000.
An IRA rollover for charitable contributions. The benefit would permit IRA owners, starting at age 70½, to make tax-free charitable gifts totaling up to $100,000 per year from their IRA’s directly to eligible charities, including colleges and universities.
The measure — worked out by the Finance Committee’s chairman, Sen. Max Baucus of Montana, and its senior Republican member, Sen. Charles E. Grassley of Iowa, marks a major breakthrough in the effort to reinstate the benefits.
It remains unclear, however, whether the U.S. House of Representatives, which earlier passed its own tax-extension package, will agree to the Senate’s plan to offset only a portion of the cost of the benefits. The House majority leader, Rep. Steny H. Hoyer, a Democrat of Maryland, has been adamant that the tax extenders comply with pay-as-you-go rules that require new spending to be offset. —Kelly Field
