Emerging Fiscal Deal Would Extend Tuition Tax Credit
Many of the details on a possible deal between the White House and Congress to avert the looming "fiscal cliff" are still unclear -- including, most crucially for higher education, what (if any) spending cuts would be included. But a possible agreement on taxes, reportedly reached today between Vice President Joe Biden and the Senate Republican leader, Mitch McConnell, would extend the American Opportunity Tax Credit for college tuition for five years.
The tax credit, originally included in the 2009 stimulus bill, provides up to $2,500, of which $1,000 is refundable. It was scheduled to expire this week without Congressional action.
If a deal is not reached to avert the tax increases, many domestic discretionary programs — including some important to higher education — will see an 8.2 percent cut in 2013. In a statement Monday afternoon, President Obama said the future of the spending cuts remains unresolved, but said he would insist on a balanced approach to avert the across-the-board cuts.