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1999 SESSION

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HB 1740 Income tax credits for educational expenses and contributions.

Introduced by: Jay Katzen | all patrons    ...    notes | add to my profiles

SUMMARY AS INTRODUCED:

Income tax credits for educational expenses and contributions. Establishes nonrefundable income tax credits for tuition and other instructional fees charged by a public or private school and for certain fees and costs incurred in association with home schooling. The maximum amount of the credit is 80 percent of the qualifying expenses incurred per child, or 100 percent if the taxpayer is a member of a household whose adjusted gross income does not exceed 185 percent of the federal poverty guideline amount. To qualify for the credit, the student for whom the expenses were incurred must be eligible to be enrolled in a public school free of charge, qualify to be claimed as a dependent on the taxpayer's federal tax return, and must not attend a free public school during the period that the expenses were incurred. The maximum amount of the credit for taxable year 2000 is 10 percent of the average per-pupil public expenditure for fiscal year 1999. In subsequent years, the percentage increases by 10 percent per year until taxable year 2004, when the maximum allowable credit is capped at the greater of 50 percent of the average per-pupil public expenditure for the preceding fiscal year or $2,500. The legislation also provides an income tax credit for cash donations to a charitable, Virginia-chartered tax exempt corporation that (i) provides financial assistance for the education of children from households whose adjusted gross income does not exceed 185 percent of the federal poverty guideline amount and (ii) expends all of certain cash contributions as grants to cover qualifying educational expenses of such children. The maximum amount of the credit starts at $50 per taxpayer for taxable year 2000, and increases in $50 annual increments thereafter until reaching $200 in 2003. Such contributions cannot be designated for the direct benefit of a child or dependent of the taxpayer or his immediate family. Taxpayers cannot claim both types of credits in the same year. Both types of tax credits become effective for taxable years beginning on or after January 1, 2000. The Department of Taxation is required to promulgate regulations to implement these credits, including providing the format for a standardized receipt to be issued by school tuition organizations and qualifying schools.


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