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How the Tax Bill Affects

Independent Schools

 

Congress is moving quickly to overhaul the tax code by January 1. The final bill may have significant consequences for independent schools on everything from charitable giving to employee housing. The House and Senate have each passed their version of a tax reform bill, and a conference committee has been established to reconcile the two pieces of legislation.

 

 Now is the last big chance for you to weigh in on behalf of independent schools before the final vote. Do you want to speak out? NAIS's brand-new Action Center enables you to send a letter to your elected officials at the click of a button! You can use provided talking points or customize the communication as you see fit.

 

While these bills are complex, there are four main issues on which NAIS urges you and the independent school community to weigh in:  

 

  • Charitable Giving: Both the House and Senate bills would decrease the incentive for charitable giving. We support providing taxpayers with the ability to benefit from charitable giving regardless of whether they itemize on their tax returns so that giving remains strong in this country.  

  • Tuition Remission/Employer-provided Educational Assistance: The House bill eliminates the tax-free tuition remission and employer-provided education benefits. This means that as of January 1, 2018, any tuition remission provided to children of staff and any education benefits provided to the employee would be considered taxable income to that employee. We urge the conference committee to follow the lead of the Senate and retain these benefits.  

  • Tax-exempt Bonds: The House bill eliminates tax-exempt bond financing for nonprofits. These bonds, called qualified 501(c)(3) private-activity bonds, have a much lower interest rate than taxable bonds. Independent schools rely on tax-exempt bonds to lower their borrowing costs when embarking on critical capital infrastructure projects such as academic buildings and residence halls. We urge the conference committee to follow the lead of the Senate and retain tax-exempt bonds.  

  • Employer-provided Housing: The House bill limits and phases out the tax-free, employer-provided housing benefit. This bill will limit the tax-free benefit of employer-provided housing to $50,000, and any value beyond that amount will be taxable. For individuals earning more than $120,000, the benefit will be reduced by $1 for every $2 of income beyond $120,000. For some staff, including heads of school, the benefit will likely get erased entirely, and the full value of their housing will be taxable income now. We urge the conference committee to follow the lead of the Senate and retain the full employer-provided housing benefit.  

Take action NOW:

 

  • Learn: Read more about the tax bills, what they contain, and how they may affect you at the NAIS Legal and Legislative Resources tax page.

  • Act: Visit the NAIS Action Center for talking points and draft letters you can review and send within minutes. Feel free to customize to tell your school’s story!

  • Share: Tell your colleagues and friends in the independent school community about this effort—the Action Center is for everyone!

Thank you for your time and engagement. Please do not hesitate to contact me at wilson@nais.org or Whitney Silverman at silverman@nais.org with any questions.

Best,
Debra Wilson
NAIS General Counsel