Under current law, individuals may claim an income tax credit of up to $500 for payments made on their own qualified education loans during the tax year. Payments made by others toward the individual taxpayer’s loans may not be used to claim the credit.

The credit equals the least of $500, or:

• Eligible loan payments made by the taxpayer minus 10% of AGI in excess of $10,000;
• The taxpayer’s earned income for the taxable year; or
• Total interest paid on eligible loans plus 10% of the original loan amount of all eligible loans.

This bill would increase the maximum credit amount to $1,000, effective beginning in tax year 2020.