QUESTIONS AND ANSWERS
TUITION TAX DEDUCTION (SB 248)

Senator Jon Dolan (R-Lake St. Louis) has filed legislation (SB 248) to help parents pay for their children’s kindergarten through 12 th grade schooling. The assistance is provided by means of a $2500 state income tax deduction. Here are answers to questions likely to arise as lawmakers consider this legislation.

Who could claim the deduction?

Any school parent who pays tuition, attendance fees or school supplies for a dependent’s attendance at any K-12 school situated in Missouri, including public, private or religious schools.

What school-related expenses could be claimed?

Costs incurred for paying tuition, attendance fees or school-related expenses. School related expenses would cover items required by the school, such as graphing calculators, art supplies, personal athletic equipment and disposable pens, pencils and paper. Public school parents sending their child to a public school out of their home district and paying tuition could claim the deduction for those tuition charges.

How much could be claimed?

Up to $2500 per dependent. If less than $2500 in expenses is incurred for a dependent, then only that lesser amount could be claimed; for example, a deduction of $1000 could be claimed if the expenses for the dependent equaled $1000.

Would a $2500 deduction reduce taxes by $2500?

No. The deduction would reduce by $2500 the income subject to taxation. Taxes are paid on a person’s adjusted gross income. A deduction reduces a person’s adjusted gross income. In Missouri the tax on income over $9,000 is calculated at six percent. Hence, the actual tax savings on a $2500 deduction would be $150 for most taxpayers.

So $150 is the total tax savings?

The tax savings would be more if the parents claim the deduction for more than one dependent. For example, if the parents claimed the full $2500 deduction for each of three dependents, they would realize tax savings of $450 (3 x $150).

Do other Midwestern states provide tax breaks to parents for school-related expenses?

Yes. Iowa, Illinois and Minnesota offer parents tax concessions for education-related expenses incurred at public, private or religious schools.

Has the U.S. Supreme Court ever ruled on school tax deductions or credits?

Yes. In Mueller v. Allen, 463 US 388 (1983), the U.S. Supreme Court upheld as constitutional a Minnesota law that provided a state income tax deduction for K-12 educational expenses. The court concluded that such a tax program had the secular purpose of promoting an educated citizenry.

Does the Missouri constitution prohibit aid to religious schools?

The Missouri constitution prohibits the state from paying funds to religious schools, but the proposed deduction is not claimed by schools but by parents and it is parents who realize the tax savings. Nothing in the Missouri constitution prohibits the state from promoting the education of its citizens through the state tax code.

Would this deduction take money away from public schools?

No. The deduction would neither reduce state aid for public schools nor reduce local tax support for public schools. It would be similar to the existing deduction parents claim for their dependents - the dependency exemption. And no one suggests the dependency exemption threatens public schools.

Why does this deduction merit support?

It promotes the education of Missouri school children. States like Iowa, Illinois and Minnesota that are known for their support of public schools also offer parents tax relief for K-12 educational expenses. There is no conflict between strong funding for public schools and tax relief for K-12 school expenses. We can do both and we should.

What can I do to promote passage of a tuition tax deduction?

First, contact Governor Matt Blunt and remind him that during the recent campaign he promised to support tax relief for all K-12 school parents. Urge him to make the SB 248 deduction a part of his state budget. Second, contact your State Representative and State Senator and urge their active support for a tuition tax deduction. Specifically, ask your State Senator to support SB 248. Finally, copy and distribute this Questions and Answers to your friends and neighbors and ask them to contact Governor Blunt and their state legislators.