White House Endorses Tighter Tax Rules for S Corps in Student Loan Bill

Senate Democrats' plan to use tighter payroll tax rules for S corporations to pay for a one-year extension of the 3.4 percent interest rate on federal student loans has the support of the White House, according to a Statement of Administration Policy. The bill's (S. 2343) provision would raise $5.9 billion over 10 years by requiring shareholders in certain closely held partnerships or S corporations to pay payroll taxes on their pro rata earnings if their income exceeds $200,000 for unmarried individuals or $250,000 for joint filers.