By Rosilyn Overton
Congress is considering a Back to School Tax Relief Act of 2002, which would give an “above the line” tax deduction of up to $3,000 to low-income parents to help pay for elementary school and high-school expenses. The bill was passed by 22-14 vote last month in the House Ways and Means Committee, and squeaked by on the floor in a 208-201 vote.
As it is now written, many New Yorkers will not be eligible to receive the deduction, since it will only apply to single filers with incomes less than $20,000 or married taxpayers, filing jointly, up to $40,000. This contrasts with the 2001 college tuition deduction, which can be used by married couples with up to $130,000 in income, singles with up to $65,000. Fortunately for these low-income taxpayers, who mostly don’t itemize, the fact that it is an above the line deduction means that they still would not have to itemize to receive the credit.
This bill differs greatly from the vouchers that were proposed by President Bush last year. First, most children of parents in this age bracket attend public school, so a voucher system doesn’t help them. What this bill would do is let parents of public school children purchase a computer, pay for remedial reading classes, and similar needed educational expenses and get a slight tax break.
Since the $3,000 is a deduction, not a credit, for most eligible people the maximum difference in their Federal tax bills would be about $810. Since New York State and New York City taxes generally follow the federal return, there should be an additional $300 or so reduction in state taxes for most Queens residents.
