This bill changes how the federal government calculates whether private colleges and universities must pay an excise tax on their investment income. Under current law, this tax applies to schools with at least 500 tuition-paying students and endowments worth at least $500,000 per student. The bill would exclude international students who are not eligible for federal financial aid from that per-student student count, which could push some schools with large numbers of such students over the threshold and make them newly subject to the tax, since the endowment would be divided among fewer countable students. Affected institutions would also be required to report both the old and new student counts to the IRS, so the effects of the change can be tracked. These provisions would take effect for tax years beginning after December 31, 2024, giving colleges roughly a year to prepare for the new calculation and reporting requirements.
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