Individual taxpayers can deduct the cost of college tuition for themselves, their spouses, and their dependents. The Tuition and Fees Deduction is an above-the-line deduction taken directly on Form 1040 or the shorter Form 1040A.
Eligibility for the Tuition and Fees Deduction
The deduction is available for any person who paid tuition and other required fees for attending college, or any other post-secondary school.
Parents can deduct tuition for their kids as long as the parents claim the student as a dependent. However, the deduction is not available for married couples who file separate tax returns. The tuition deduction is not restricted based on what year of college you are in, or if you are a part-time or full-time student. Taking even one class can qualify you for this deduction.
Expenses that Qualify for Deduction:
- Tuition at an eligible educational institution, and
- Fees required as a condition for enrollment or attendance
You can deduct tuition and other required fees for the year that you are filing your return and for classes starting in the first three months of the year to follow. The IRS provides the following explanation in Publication 970, Tax Benefits for Education:
“The tuition and fees deduction is based on qualified education expenses you pay for yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. Generally, the deduction is allowed for qualified education expenses paid in 2014 in connection with enrollment at an institution of higher education during 2014 or for an academic period beginning in 2014 or in the first 3 months of 2015.
“For example, if you paid $1,500 in December 2014 for qualified tuition for the spring 2015 semester beginning in January 2015, you may be able to use that $1,500 in figuring your 2014 deduction.”
The same tactic can be used in 2015 and 2016. If a person pays tuition for spring 2016 classes in 2015, that tuition payment can be deducted on a person’s 2015 tax return. The tax law underlying this tactic is Internal Revenue Code section 222paragraph (d)(3)(B).
However, expenses for courses related to sports, games or hobbies and non-academic fees such as student activity fees, athletic fees and insurance expenses are not deductible, even if these fees are required by the school.
Similarly, the cost of books, supplies and computer equipment cannot be deducted as part of the tuition and fees deduction. Schools report the amount of qualifying expenses to you and to the IRS using Form 1098-T.
“An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education…. The educational institution should be able to tell you if it is an eligible educational institution. Certain educational institutions located outside the United States also participate in the U.S. Department of Education’s Federal Student Aid (FSA) programs” (from Publication 970).
Where to Claim the Tax Deduction
Report the tuition and fees tax deduction using Form 8917 (pdf, 2 pages). The amount of the deduction is also reported on Form 1040 or Form 1040A.
Limits and Income Ranges for the Tuition and Fees Deduction
The maximum amount of the tuition and fees deduction you can claim is $4,000 per year. The deduction is further limited by the following income ranges:
- $4,000 maximum for income up to $65,000 ($130,000 for joint filers);
- $2,000 maximum for income over $65,000 and up to $80,000 ($160,000 for joint filers);
- no deduction for income over $80,000 ($160,000 for joint filers).
Income for the purpose of determining the limitation of the tuition and fees deduction is modified adjusted gross income. The adjusted gross income figure is modified by not taking the tuition and fees deduction into account, subtracting out any domestic production activities deduction, and adding back any foreign earned income exclusion, foreign housing exclusion, foreign housing deduction, or income excluded from American Samoa or Puerto Rico if any.
Other Education-Related Tax Breaks
These tax credits have different income ranges and different eligibility criteria than the Tuition & Fees Deduction.
My suggestion is to see which tax breaks you qualify for, and if you qualify for more than one tax break, use whichever tax break that provides the greatest benefit.
Expiration Date: 2016
While the tuition deduction has been around since 2002, this deduction is scheduled to expire at the end of the year 2016. This deduction will not be available for tax year 2017, unless Congress decides to revive this tax break.
Resources from the IRS Web site
- Publication 970, Tax Benefits for Education, especially Chapter 6, which provides details on the tuition and fees deduction.
- Form 8917 (pdf, 2 pages) this is the form used to claim the tuition and fees deduction. Instructions are included on the form.
- Tax Topic 457 has a brief overview of the tuition and fees deduction.
- Tax Benefits for Education: Information Center
- Publication 17, Your Federal Income Tax, Chapter 19, Education-Related Adjustments
- Am I Eligible to Claim an Education Credit? is an interactive tool to help you determine if you are eligible for the tuition and fees deduction, American Opportunity credit or the Lifetime Learning credit
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