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Important tax matter affecting all in Graduate School (fwd)

Andrew Ray aray at nospam.edu
Fri Jun 20 12:25:17 EST 1997

Below is an email I received about a bill passing through Congress that

would allow tuition waivers to be assessed as taxable income (read about

it below).  I know I couldn't afford the extra tax, going to a private

school with a relatively high tuition.  Even my friends in public schools

would have a hard time making up the difference, because even though

their tuitions are lower, so are their stipends.  If you are a graduate

student, or are helping to support one, please write your state's

Senators and urge them to remove this provision or kill the bill in the

Senate (I think it says it already passed the House).  If you aren't a

student anymore, but know some grad students, please pass this

information on to them.  Sorry about the spamming (if you're reading this

on a newsgroup), but I felt it necessary to get this information out to

as many people as possible as soon as possible.  Thanks for reading,




Andrew Ray
Indentured Servant
Emory University Neuroscience Program
aray at emory.edu

>The bill is being marked up in the Senate today--I urge you to call 
>Senator Max Cleland (Democrat)  office - 404-331-4811; 202-224-3521; 
>senator_max_cleleand at cleland.senate.gov
>Senator Paul Coverdell office (Republican) office -404-347-2202; 
>senator_coverdell at coverdell.senate.gov
>                Tax Scenarios Show Loss of Section 117d
>           Could Increase Grad Student Taxes by up to 1000%
>                        or more than $500/month>                 

Washington, DC . . . The House Ways and Means Committee has voted in
favor of a tax bill that includes among its provisions a tax increase on
graduate teachers and researchers of up to 1000% (one thousand percent).
In a vote strictly on party lines, the Committee approved the tax
proposal originally offered by Chairman Bill Archer (R-TX).  Quick surveys done
by NAGPS have concluded that the tax proposal would dramatically increases
tax burdens on graduate students making less than $15,000 per year.

Among the various changes to the tax code, the Chairman's proposal would
eliminate Section 117d of the Internal Revenue code.  Section 117d
currently protects from taxation the tuition waivers often granted by
universities to graduate teaching and researchers in return for teaching
up to 40% of the courses on some of the nation's largest university

Because the value of tuition waivers often exceeds stipends also paid to
TAs and RAs, counting those waivers as income has the potential to
increase taxes by thousands of dollars per student per year.  Seven
student scenarios (listed below) illustrate how some students will pay
1000% (one thousand percent) more in taxes, or up to more than $500 per

In response, NAGPS (the National Association of Graduate-Professional
Students) is calling upon students, faculty and administrators
throughout the United States to contact members of Congress to protest this new
tax.  Graduate students throughout the US have expressed shock and
surprise at the proposal, with email listserves, web sites and
word-of-mouth quickly alerting students.

"It is sad that a bill being offered to make taxes `more fair' has
instituted a brand new tax on students many of whom earn less than
$15,000 per year," said NAGPS Executive Director Kevin Boyer.  "It is also a
shame that, instead of taking a pro-graduate-education stance in this bill,
the committee chose instead to offer no incentives for graduate education."
NAGPS had anticipated that the tax legislation would extend a tax
deduction for student loan interest, and would offer a tax incentive to
employers who sought to pay for employees' graduate school.  Both
provisions have widespread bipartisan support and were promised in 1996
Congressional or Presidential campaigns.

Those interested in learning more about the tax bill should visit the
NAGPS web site at http://www.nagps.org/NAGPS/.  NAGPS is also running a
legislative alert email list.  To be placed on the list, send an email
request to nagps at netcom.com


>        NAGPS Asked:  What if Section 117d were eliminated?
>           What could be the effect on your tax bill?
>          These students represent some of the effects.
>Female PhD Student
>Asian Languages & Culture
>University of Michigan/Ann Arbor
>1997 Gross:                     $ 8,333
>Projected 1997 Income Tax:      $   268
>1997 Net Income                 $ 8,065
>Stipend Income:                 $ 8,333
>Tuition waiver (2 x $9470):     $18,940
>Total Income:                   $27,273
>Projected 1997 Income Tax:      $ 3,109 (+ 1160%)
>Tuition Paid:                   $18,940
>1997 Net Income                 $5,224 (-$237/mo)
---Extra examples cut---

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