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H.R. 902: DEBT Act of 2021


The text of the bill below is as of Feb 5, 2021 (Introduced).


I

117th CONGRESS

1st Session

H. R. 902

IN THE HOUSE OF REPRESENTATIVES

February 5, 2021

(for himself and Miss Rice of New York) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to expand the exclusion for employer-provided educational assistance and to expand the availability of the student loan interest deduction.

1.

Short title

This Act may be cited as the Decreasing Employees Burdensome Taxes from Student Loans Act of 2021 or the DEBT Act of 2021.

2.

Exclusion for employer payment of qualified education loans

(a)

In general

Section 127(c)(1) of the Internal Revenue Code of 1986 is amended by striking and at the end of subparagraph (A), by redesignating subparagraph (B) as subparagraph (C), and by inserting after subparagraph (A) the following new subparagraph:

(B)

the payment by an employer, whether paid to the employee or to a lender, of principal or interest on any qualified education loan (as defined in section 221(d)(1)) incurred by the employee, and

.

(b)

Denial of double benefit

Section 221(e)(1) of such Code is amended by inserting before the period at the end the following: , or for any amount which is excludable from gross income under section 127(c)(1)(B).

(c)

Effective date

The amendments made by this section shall apply to payments made by employers after December 31, 2021.

3.

Increase in maximum amount excludable under educational assistance programs

(a)

In general

The text of paragraph (2) of section 127(a) of the Internal Revenue Code of 1986 is amended by striking $5,250 both places it appears and inserting $10,000.

(b)

Conforming amendment

The heading for section 127(a)(2) of such Code is amended by striking $5,250 maximum and inserting Maximum.

(c)

Effective date

The amendments made by this section shall apply to payments made by employers after December 31, 2021.

4.

Modification of deduction for interest on education loans

(a)

Increased maximum deduction

Section 221(b)(1) of the Internal Revenue Code of 1986 is amended by striking $2,500 and inserting $5,000.

(b)

Increased income limitation

Section 221(b)(2)(B)(ii) of such Code is amended by striking $15,000 ($30,000 and inserting $85,000 ($115,000.

(c)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2021.