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Congressman Jason Smith

Representing the 8th District of Missouri

Congressman Jason Smith’s Initiative for Students Passes House

Dec 17, 2015
Press Release
Provision was included in Protecting Americans from Tax Hikes Act

WASHINGTON, D.C. – Today Congressman Smith voted to keep a $622 billion tax increase from hitting American families. One of the provisions in the Protecting Americans from Tax Hikes Act is Congressman Smith’s initiative, H.R. 3409 the Tax Relief for Working Students Act, to make college more affordable for students.

The language authored and introduced by Smith treats income as a scholarship rather than as a wage if it is earned at a comprehensive student work-learning-service program at a certified Work College.

“It only makes sense that we encourage the hard work of responsible students,” said Smith, a member of the House Ways and Means Committee, which handles all federal tax issues. “Work Colleges, including College of the Ozarks in southern Missouri, start students on the right track. I am glad that my language was included to reduce the tax burden students are facing and makes it easier for them to earn the scholarships they need to pay for college.”

Currently, compensation students earn at Work Colleges is taxed as income, rather than a tax-free scholarship. Smith’s provision clarifies the tax treatment of these scholarships and restores the specific tax protection that was erroneously eliminated by Congress in 1986.

America’s seven Work Colleges are unique, four-year liberal arts institutions. In addition to graduating with little or no student loan debt, Work College students finish school with four years of work experience. Typical entry level jobs in the program include landscaping and administration, and students average about eight to 15 hours of work per week in addition to their education and service requirements.

“Congressman Smith has been leading the fight to make college more affordable for students,” said Jerry C. Davis, President of College of the Ozarks. “This is a big win for the students who see Work Colleges as a way to get a college education without student loan debt.”

The Protecting Americans from Tax Hikes Act also included language making permanent the American Opportunity Tax Credit (AOTC) which provides a $2,500 tax credit to students for four years of post-secondary education. Additionally the legislation also made permanent a provision of the tax code facing expiration which allowed teachers to deduct up to $250 from their income expenses they paid for out of pocket to improve their classrooms.