Financial Aid

Is College Tuition Tax Deductible?

Tax year is a factor.

Shawna Newman

March 20, 2022

Find out if college tuition is tax-deductible and hear other education tax credits you could claim.
Is College Tuition Tax Deductible?
As Tax Day draws near you may wonder if you’re claiming every tax deduction possible. Families of dependent college students and independent college students often want to know if their college tuition is tax deductible.

Is Tuition Tax Deductible

The short answer is, yes—there was a college tuition and fees deduction for taxpayers that paid qualified tuition and fees for tax years 2019 and 2020. However, the college tuition tax deduction does not apply for the 2021 tax year. The Taxpayer Certainty and Disaster Tax Relief Act of 2020 cancelled the tuition and fees deduction. Congress House Bill 133, section 104, eliminated the tuition deduction for the current tax-year 2021. This amendment included increased income limitations for the Lifetime Learning Credit.

Tuition and Fees Deduction 2020 & 2019

If you have already filed your tax return for years 2019 or 2020 and would now like to claim a college Tuition and Fees Deduction, you can file an amended return. The IRS requests you complete a Form 1040-X. If amending your 2020 or 2019 tax returns you could reduce your taxable income by $4,000 or $2,000. The deduction amount is based upon your modified adjusted gross income (MAGI) and filing status. A completed Form 8917 is needed to claim this deduction.
According to Business Insider, filing circumstances determine tax four breaks below:
  1. $4,000 deduction: Filing Single, MAGI less than $65,000
  2. $4,000 deduction: Filing Married Joint, MAGI less than $130,000
  3. $2,000 deduction: Filing Single, MAGI $65,000-$80,000
  4. $2,000 deduction: Filing Married Joint, MAGI $130,000-$160,000

Approved College Expenses for Tuition and Fees Deduction

Costs covered as an approved deduction expense include tuition and student fees required to attend an approved college or university. Textbooks, student supplies, and equipment necessary to complete college coursework are also considered eligible expenses. 529 college savings account holders can claim tuition and fee deductions, if the deductions claimed were not used with these savings funds.

Tuition and Fees Deduction Limitations

As mentioned above, the Tuition and Fees Deduction is not available for the 2021 tax year—but you can amend previous tax returns to claim it. Keep in mind you cannot combine education benefits. Forbes adds, “You can’t take more than one education benefit for the same student and expenses.” If you used the American Opportunity Tax Credit or Lifetime Learning Tax Credit in the tax return, you’re looking to amend, you will not qualify for the Tuition and Fee Deduction. Married couples that filed separately are not eligible for the previous tuition and fees deduction. The IRS provides a tool to help you determine if you’re eligible to claim and education credit. Expenses not covered by the Tuition and Fees Deduction include transportation, insurance, room and board-related costs, health fees, or other personal living expenses. If you used a scholarship, grant, or form of employee assistance to pay for college expenses, you cannot claim those covered costs in the deduction. 529 college saving plan distributions used to pay for 2019 or 2020 college expenses cannot be claimed as Tuition and Fee Deductions.

Other Education Expenses Tax Credits

If you’re not planning to amend your 2019 or 2020 taxes to claim the Tuition and Fees Deduction, other education tax credits are available. Using the 1098-T form, provided to you by your university or college, you can choose from two types of education tax credits:

The American Opportunity Tax Credit

This education credit is for students working toward a degree, certification, or another approved credential program.
  • $2,500 credit for qualified education expenses

    The Lifetime Learning Credit

    This education credit is for students working toward more education of any kind—career development, vocational and technical programs, four-year degrees and more.
  • $2,000 credit for qualified education expenses You cannot claim both credits in the same tax year. For more information on taxes related to education, consider connecting with a personal financial advisor. Investopedia offers great tips to find the right service for you and/or your family.

    Scholarships to Offset College Costs

    For students and parents looking to cut expenses related to college, be sure applying for scholarships is part of your financial plan. Scholarships can be used to pay for tuition, fees, and most educational-related costs. This is, however, up to each scholarship provider. In most cases, scholarships are non-taxable too. Combining scholarships, financial aid, and tax credits is a great way to help lower the cost of college. Just as you create personal financial goals, establish a scholarship application goal as well. Many students start with a goal to apply for four scholarships per month. Save time by creating a free Fastweb profile. Our algorithm matches students to scholarships that fit their unique circumstances—from family situations, heritage, interests, GPA and more.
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