The GOP Tax Bill has been signed into law. What does this mean for education? Education Week breaks it down into four main points.
- School funding in states and districts might get shaken up
State and local tax deductions are capped at $10,000 and taxpayers can choose to deduct this from property and sales taxes they pay or property and income tax. Critics say decreasing state and local tax deductions could lead to stagnant or reduced state and local K-12 funding.
- The teacher tax-deduction rollercoaster ended where it started
Initially, the tax reform bill introduced to the House eliminated the $250 deduction for purchasing classroom supplies with personal money. In the Senate’s version, the deduction was doubled to $500. In the end, the deduction remains $250 in the GOP tax bill.
- Saving for private school choice just go easier – at least for some
The Tax Cuts and Job Acts allow parents to use college savings plans for K-12 expenses, including private school choice, and postsecondary costs. The college savings plans are tax advantaged. Parents can set aside up to $10,000 for K-12 education in these plans.
- There are new rules for school debt and construction
In the tax bill, eliminates qualified school construction bonds which help reduced total capital costs for schools. This is particularly important for charter schools but charter advocates have praised the bill for protecting Private Activity Bonds – provides special financing for certain projects. The bill also eliminates advance refunding bonds used to pay down long-term debt at reduced costs.