APS News

Proposed Tax Bill Targets Graduate Assistants

A tax proposal released in June by Rep. Bill Archer (R-TX), Chair of the House Ways and Means Committee, has targeted graduate teaching and research assistants. Graduate students teach up to 40% of the courses on some of the nation's largest university campuses and conduct a large portion of the nation's technological, defense, medical, engineering, chemical and other research. The bill prompted an outcry from the National Association of Graduate-Professional Students (NAGPS), whose members and students held a June 19 Lobby Day in Washington, DC.

"This isn't tax relief that will help make education more accessible," said Bryan Hannegan, a graduate student at the University of California/Irvine and NAGPS President. "The proposed changes in the tax code could push people out of graduate school due to costs, could force universities to dramatically increase teaching and research assistant salaries, could increase tuition for undergraduates throughout the U.S., and could dramatically reduce the value of our nation's research dollars - much of it federal money."

Specifically, the proposed provision would eliminate a subsection 117(d) of the tax code that presently allows universities to waive the tuition of its graduate teaching and research assistants in return for the services provided by the student.

"Eliminating the exclusion from tax of these tuition waivers would have a catastrophic effect on students, as well as the entire education system," said Kevin Boyer, NAGPS Executive Director. For instance, students with a $10K stipend and tuition waiver of $20K per year would force the student to pay taxes on $30K in "income." This is despite the fact that the student would only have $10K in "cash income" from which to pay the tax.

Three other provisions in the tax code also target graduate/professional students: (1) the HOPE scholarships will be curtailed; (2) the deduction for higher education expenses specifically excludes graduate school; and (3) the extension of the Employer Provided Educational Assistance portion of the tax code (Section 127) applies only to undergraduate courses.

Individuals concerned about the tax bill should contact their own members of Congress immediately. This is particularly true for those whose House and Senate representatives are on the Conference Committee.

©1995 - 2016, AMERICAN PHYSICAL SOCIETY
APS encourages the redistribution of the materials included in this newspaper provided that attribution to the source is noted and the materials are not truncated or changed.

Editor: Barrett H. Ripin