Proposed state tax credit could help make college more affordable
A college education should be an attainable goal for every aspiring student and family in Illinois; and no family should have to bury themselves deeper into debt just to help put their kids through school.
That’s the foundation and guiding principle of a new initiative introduced by state House Republicans this month to make college more affordable for middle-income families across Illinois. We recognize that in this day and age, a college degree is a must for anyone seeking to join the competitive and increasingly global job market.
For starters, our plan would create a $1,000 tax credit to help middle-income families pay for college expenses at an Illinois accredited school. The credit would accrue for each semester that the eligible student is supported by the eligible taxpayer.
To be eligible for the credit, the family or the student must have the following status: attend a MAP-approved Illinois institution on at least a half-time basis with tuition and fees greater than $1,000, be an Illinois resident and a U.S. citizen or eligible noncitizen, and the family must have an adjusted gross income of less than $150,000.
Those already receiving Illinois MAP grants would not be eligible. This package will also include legislation that will “unlock” the limited tax deduction rights currently granted to Illinoisans who are saving for their children’s college education.
Under current Illinois law, this “upfront” deduction is only offered to contributors in a state-administered College Savings Pool account or the Illinois Prepaid Tuition Trust Fund. Right now, private-sector 529 programs, including programs operated by respected financial institutions that are based outside of Illinois, are not eligible for this upfront deduction.
As a result, many prudent Illinois families who are participating in a 529 program and saving for the future are not eligible under current Illinois law for this upfront Illinois individual income tax deduction.
Our proposal will make this deduction accessible to all families who are saving money under the umbrella of an approved 529 savings program for up to $10,000 of annual contributions made by a taxpayer.
Every young man and woman deserves an opportunity-filled future. We’ve seen too many young people not able to achieve their full potential because we haven’t done all we can to make higher education attainable for them. It’s time to step up and change the status quo to make college more affordable for every family.