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H.R. 5204 (114th): Stop Taxing Death and Disability Act


The text of the bill below is as of Dec 8, 2016 (Reported by House Committee). The bill was not enacted into law.


IB

Union Calendar No. 674

114th CONGRESS

2d Session

H. R. 5204

[Report No. 114–861, Part I]

IN THE HOUSE OF REPRESENTATIVES

May 12, 2016

(for himself, Mr. Kind, Mr. Costello of Pennsylvania, and Ms. Pingree) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

December 8, 2016

Additional sponsors: Mr. LaMalfa, Mr. Renacci, Mr. Pascrell, Mr. Sean Patrick Maloney of New York, Mr. Reichert, Mr. Hultgren, Mr. Coffman, Mr. DeSaulnier, Mr. Brat, Mr. Perlmutter, Mr. Meehan, Mr. McNerney, Mr. Poliquin, and Ms. Bonamici

December 8, 2016

Reported from the Committee on Ways and Means with an amendment

Strike out all after the enacting clause and insert the part printed in italic

December 8, 2016

The Committee on Education and the Workforce discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printed

For text of introduced bill, see copy of bill as introduced on May 12, 2016


A BILL

To amend the Internal Revenue Code of 1986 and the Higher Education Act of 1965 to provide an exclusion from income for student loan forgiveness for students who have died or become disabled.


1.

Short title

This Act may be cited as the Stop Taxing Death and Disability Act.

2.

Treatment of student loans discharged on account of death or disability

(a)

Amendments to Internal Revenue Code of 1986

(1)

In general

Section 108(f) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(5)

Discharges on account of death or disability

(A)

In general

In the case of an individual, gross income does not include any amount which (but for this subsection) would be includible in gross income by reasons of the discharge (in whole or in part) of any loan described in subparagraph (B) if such discharge was—

(i)

pursuant to subsection (a) or (d) of section 437 of the Higher Education Act of 1965 or the parallel benefit under part D of title IV of such Act (relating to the repayment of loan liability),

(ii)

pursuant to section 464(c)(1)(F) of such Act, or

(iii)

otherwise discharged on account of the death or total and permanent disability of the student.

(B)

Loans described

A loan is described in this subparagraph if such loan is—

(i)

a student loan (as defined in paragraph (2)), or

(ii)

a private education loan (as defined in section 140(7) of the Consumer Credit Protection Act (15 U.S.C. 1650(7))).

.

(2)

Effective date

The amendment made by this section shall apply to discharges of indebtedness after December 31, 2016.

(b)

Amendment to the Higher Education Act of 1965

Section 437(d) of the Higher Education Act of 1965 (20 U.S.C. 1087(d)) is amended by inserting or becomes permanently and totally disabled (as determined in accordance with regulations of the Secretary), or if the student is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death, has lasted for a continuous period of not less than 60 months, or can be expected to last for a continuous period of not less than 60 months after dies.

December 8, 2016

Reported from the Committee on Ways and Means with an amendment

December 8, 2016

The Committee on Education and the Workforce discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printed