Student Loan Interest Deduction Act of 2021

Bill 117 HR 4726, also known as the Student Loan Interest Deduction Act of 2021, aims to provide relief to individuals who are burdened by student loan debt. The bill proposes to increase the maximum deduction for student loan interest from $2,500 to $5,000 for single filers and from $5,000 to $10,000 for joint filers. This means that individuals who are paying off student loans would be able to deduct a larger portion of the interest they have paid on their loans from their taxable income.

The bill also seeks to expand eligibility for the deduction to include individuals with higher incomes. Currently, the deduction begins to phase out for single filers with a modified adjusted gross income (MAGI) of $70,000 and joint filers with a MAGI of $140,000. The bill proposes to increase these thresholds to $80,000 for single filers and $160,000 for joint filers, allowing more individuals to benefit from the deduction.

Additionally, the bill includes provisions to make the deduction above-the-line, meaning that individuals can claim the deduction without having to itemize their deductions. This simplifies the process for taxpayers and makes it easier for them to take advantage of the deduction. Overall, the Student Loan Interest Deduction Act of 2021 aims to provide much-needed relief to individuals struggling with student loan debt by increasing the deduction for student loan interest, expanding eligibility for the deduction, and simplifying the process for claiming the deduction.