Post by Logan on Jan 26, 2017 1:50:12 GMT -6
Top 13 percent of earners receiving two-thirds of private school tax benefit
Tax filers making more than $100,000 a year are claiming two-thirds of a private school tuition tax cut enacted four years ago, according to data from the Department of Revenue.
The tax cut is costing the state about $12 million a year, far less than the $30 million projected when it was slipped into the 2013-15 state budget. The $18 million adjustment to the estimate was already factored into the state’s financial bottom line in 2016, DOR spokesman Casey Langan said, so it’s not an amount that can be tapped for new spending in the 2017-19 budget.
Families sending students to private school can reduce their adjusted gross income by up to $10,000 for high school tuition and up to $4,000 for elementary school tuition. The private school tuition exclusion, similar to an exclusion for a retirement account contribution, reduces a tax filer’s income before deductions and credits are applied, so the actual amount in tax savings is a few hundred dollars per tax filer. Unlike a tax deduction, filers don’t have to itemize to benefit from it.
Almost $8 million of the total cut went to families in the top 13 percent of income earners in the state in 2015. A total of 20,560 tax filers making more than $100,000 claimed the exclusion, receiving a tax cut of about $388 per filer, according to DOR.
Read more: host.madison.com/wsj/news/local/govt-and-politics/top-percent-of-earners-receiving-two-thirds-of-private-school/article_351e9c72-fc0a-573f-b075-52d82f0a0aff.html
Tax filers making more than $100,000 a year are claiming two-thirds of a private school tuition tax cut enacted four years ago, according to data from the Department of Revenue.
The tax cut is costing the state about $12 million a year, far less than the $30 million projected when it was slipped into the 2013-15 state budget. The $18 million adjustment to the estimate was already factored into the state’s financial bottom line in 2016, DOR spokesman Casey Langan said, so it’s not an amount that can be tapped for new spending in the 2017-19 budget.
Families sending students to private school can reduce their adjusted gross income by up to $10,000 for high school tuition and up to $4,000 for elementary school tuition. The private school tuition exclusion, similar to an exclusion for a retirement account contribution, reduces a tax filer’s income before deductions and credits are applied, so the actual amount in tax savings is a few hundred dollars per tax filer. Unlike a tax deduction, filers don’t have to itemize to benefit from it.
Almost $8 million of the total cut went to families in the top 13 percent of income earners in the state in 2015. A total of 20,560 tax filers making more than $100,000 claimed the exclusion, receiving a tax cut of about $388 per filer, according to DOR.
Read more: host.madison.com/wsj/news/local/govt-and-politics/top-percent-of-earners-receiving-two-thirds-of-private-school/article_351e9c72-fc0a-573f-b075-52d82f0a0aff.html