U.s. congressman Rodney davis proudly representing the 13th district of illinois

Normal, IL – U.S. Rep. Rodney Davis (R-Ill.) announced new legislation to ensure all graduate students are treated fairly under the tax code at a press conference with Illinois State University officials on Tuesday, March 27th.

Last week during the thick of March Madness, Davis introduced H.R. 5396, the Graduate Assistant Parity Act (GAP Act) to create parity for graduate students who receive tuition reductions but are not teaching or research assistants. Davis crafted this legislation after hearing from graduate assistants from the Illinois State University athletic department who do not receive this tax benefit since they do not teach or assist with research. Under current law, only graduate students who are teaching or research assistants receive tax exemptions for their reduced or waived tuition.

This benefit, Section 117(d), is continued under the new tax code and Davis successfully preserved the graduate tuition waiver in the tax reform package passed last year.  

Graduate assistants who dedicate the same time and energy helping in another capacity are not eligible for this tax benefit and are forced to pay taxes on the reduced or waived tuition amount. Several graduate assistants from the Illinois State University men’s basketball team brought this to Davis’ attention during a meeting and explained how this places a substantial financial burden on them since they never physically possess the tuition money.

The new legislation will provide tax relief for these students and allow all graduate students who receive reduced or waived tuition to take advantage of this helpful tax benefit.