DEBT Act of 2021
Bill: H.R.902 | Sponsor: Rep. Stivers, Steve (R-OH)
Policy area: Taxation

Summary:
Decreasing Employees Burdensome Taxes from Student Loans Act of 2021 or the DEBT Act of 2021
This bill modifies tax provisions relating to the exclusion from employee gross income for employer-provided educational assistance and the student loan interest tax deduction. Specifically, it (1) expands the tax exclusion for employer-provided educational assistance programs to include an employer's payment of any qualified education loan incurred by an employee, (2) increases the maximum amount that may be excluded from the gross income of an employee under employer-provided educational assistance programs, and (3) increases the maximum tax deduction and the income limitation for interest on education loans.

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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 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''.

SEC. 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.

SEC. 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.

SEC. 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.
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