Table of Contents
- Can You Claim the Deduction?
- What Expenses Qualify?
- Who Is an Eligible Student?
- Who Can Claim a Dependent's Expenses?
- Figuring the Deduction
- Claiming the Deduction
- Illustrated Example
You may be able to deduct qualified education expenses paid during the year for yourself, your spouse, or your dependent(s). You cannot claim this deduction if your filing status is married filing separately or if another person can claim an exemption for you as a dependent on his or her tax return. The qualified expenses must be for higher education, as explained later under Qualified Education Expenses .
Table 6-1. Tuition and Fees Deduction at a Glance summarizes the features of the tuition and fees deduction.
The following rules will help you determine if you can claim the tuition and fees deduction.
Generally, you can claim the tuition and fees deduction if all three of the following requirements are met.
You pay qualified education expenses of higher education.
You pay the education expenses for an eligible student.
The eligible student is yourself, your spouse, or your dependent for whom you claim an exemption on your tax return.
The term “qualified education expenses” is defined later under Qualified Education Expenses . “Eligible student” is defined later under Who Is an Eligible Student . For more information on claiming the deduction for a dependent, see Who Can Claim a Dependent's Expenses , later.
Do not rely on this table alone. Refer to the text for complete details.
|What is the maximum benefit?||You can reduce your income subject to tax by up to $4,000.|
|What is the limit on modified adjusted gross income (MAGI)?||$160,000 if married filing a joint return;
$80,000 if single, head of household, or qualifying widow(er).
|Where is the deduction taken?||As an adjustment to income on
Form 1040 or Form 1040A.
|For whom must the expenses be paid?||A student enrolled in an eligible educational institution who is either:
•your spouse, or
•your dependent for whom you claim an exemption.
|What tuition and fees are deductible?||Tuition and fees required for enrollment or attendance at an eligible postsecondary educational institution, but not including personal, living, or family expenses, such as room and board.|
You cannot claim the tuition and fees deduction if any of the following apply.
Your filing status is married filing separately.
Another person can claim an exemption for you as a dependent on his or her tax return. You cannot take the deduction even if the other person does not actually claim that exemption.
Your modified adjusted gross income (MAGI) is more than $80,000 ($160,000 if filing a joint return).
You (or your spouse) were a nonresident alien for any part of 2014 and the nonresident alien did not elect to be treated as a resident alien for tax purposes. More information on nonresident aliens can be found in Publication 519.
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.
For purposes of the tuition and fees deduction, qualified education expenses are tuition and certain related expenses required for enrollment or attendance at an eligible educational institution.
In the following examples, assume that each student is an eligible student and each college or university an eligible educational institution.
Jackson is a sophomore in University V's degree program in dentistry. This year, in addition to tuition, he is required to pay a fee to the university for the rental of the dental equipment he will use in this program. Because the equipment rental fee must be paid to University V for enrollment and attendance, Jackson's equipment rental fee is a qualified education expense.
Donna and Charles, both first-year students at College W, are required to have certain books and other reading materials to use in their mandatory first-year classes. The college has no policy about how students should obtain these materials, but any student who purchases them from College W's bookstore will receive a bill directly from the college. Charles bought his books from a friend, so what he paid for them is not a qualified education expense. Donna bought hers at College W's bookstore. Although Donna paid College W directly for her first-year books and materials, her payment is not a qualified education expense because the books and materials are not required to be purchased from College W for enrollment or attendance at the institution.
When Marci enrolled at College X for her freshman year, she had to pay a separate student activity fee in addition to her tuition. This activity fee is required of all students, and is used solely to fund on-campus organizations and activities run by students, such as the student newspaper and the student government. No portion of the fee covers personal expenses. Although labeled as a student activity fee, the fee is required for Marci's enrollment and attendance at College X. Therefore, it is a qualified expense.
You cannot do any of the following.
Deduct qualified education expenses you deduct under any other provision of the law, for example, as a business expense.
Deduct qualified education expenses for a student on your income tax return if you or anyone else claims an American opportunity or lifetime learning credit for that same student in the same year.
Deduct qualified education expenses that have been used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or a qualified tuition program (QTP). For a QTP, this applies only to the amount of tax-free earnings that were distributed, not to the recovery of contributions to the program. See Coordination With Tuition and Fees Deduction in chapter 8, Qualified Tuition Program, later.
Deduct qualified education expenses that have been paid with tax-free interest on U.S. savings bonds (Form 8815). See Figuring the Tax-Free Amount in chapter 10, Education Savings Bond Program, later.
Deduct qualified education expenses that have been paid with tax-free educational assistance, such as a scholarship, grant, or assistance provided by an employer. See the following section on Adjustments to Qualified Education Expenses.
For each student, reduce the qualified education expenses paid by or on behalf of that student under the following rules. The result is the amount of adjusted qualified education expenses for each student. You must also reduce qualified education expenses by the other amounts referred to in No Double Benefit Allowed , earlier.
The tax-free part of scholarships and fellowship grants (see Tax-Free Scholarships and Fellowship Grants in chapter 1, Scholarships, Fellowship Grants, Grants, and Tuition Reductions),
Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowship Grants, Grants, and Tuition Reductions),
Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ),
Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowship Grants, Grants, and Tuition Reductions), and
Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance.
Generally, any scholarship or fellowship grant is treated as tax free. However, a scholarship or fellowship grant is not treated as tax free to the extent the student includes it in gross income (if the student is required to file a tax return for the year the scholarship or fellowship grant is received) and either of the following is true.
The scholarship or fellowship grant (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowship Grants, Grants, and Tuition Reductions.
The scholarship or fellowship grant (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowship Grants, Grants, and Tuition Reductions.
Payment for services, such as wages,
An inheritance, or
A withdrawal from the student's personal savings.
The use of the money is restricted, by the terms of the scholarship or fellowship grant, to costs of attendance (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowship Grants, Grants, and Tuition Restrictions.
The use of the money is not restricted.
In 2014, Jackie paid $3,000 for tuition and $5,000 for room and board at University X. The university did not require her to pay any fees in addition to her tuition in order to enroll in or attend classes. To help pay these costs, she was awarded a $2,000 scholarship and a $4,000 student loan. The terms of the scholarship state that it can be used to pay any of Jackie's college expenses.
University X applies the $2,000 scholarship against Jackie's $8,000 total bill, and Jackie pays the $6,000 balance of her bill from University X with a combination of her student loan and her savings. Jackie does not report any portion of the scholarship as income on her tax return.
In figuring the tuition and fees deduction, Jackie must reduce her qualified education expenses by the amount of the scholarship ($2,000) because she excluded the entire scholarship from her income. The student loan is not tax-free educational assistance, so she does not need to reduce her qualified expenses by any part of the loan proceeds. Jackie is treated as having paid $1,000 in qualified education expenses ($3,000 tuition – $2,000 scholarship) in 2014.
The facts are the same as in Example 1, except that Jackie reports her entire scholarship as income on her tax return. Because Jackie reported the entire $2,000 scholarship in her income, she does not need to reduce her qualified education expenses. Jackie is treated as having paid $3,000 in qualified education expenses.
Medical expenses (including student health fees),
Room and board,
Similar personal, living, or family expenses.
This is true even if the amount must be paid to the institution as a condition of enrollment or attendance.
For purposes of the tuition and fees deduction, an eligible student is a student who is enrolled in one or more courses at an eligible educational institution (as defined under Qualified Education Expenses , earlier).
Have paid the expenses, and
Claim an exemption for the student as a dependent.
For you to be able to deduct qualified education expenses for your dependent, you must claim an exemption for that individual. You do this by listing your dependent's name and other required information on Form 1040 (or Form 1040A), line 6c.
|IF your dependent is an eligible student and you...||AND...||THEN...|
|claim an exemption for your dependent||you paid all qualified education expenses for your dependent||only you can deduct the qualified education expenses that you paid. Your dependent cannot take a deduction.|
|claim an exemption for your dependent||your dependent paid all qualified education expenses||no one is allowed to take a deduction.|
|do not claim an exemption for your dependent||you paid all qualified education expenses||no one is allowed to take a deduction.|
|do not claim an exemption for your dependent||your dependent paid all qualified education expenses||no one is allowed to take a deduction.|
In 2014, Ms. Baker makes a payment directly to an eligible educational institution for her grandson Dan's qualified education expenses. For purposes of deducting tuition and fees, Dan is treated as receiving the money from his grandmother and, in turn, paying his own qualified education expenses.
If an exemption cannot be claimed for Dan on anyone else's tax return, only Dan can claim a tuition and fees deduction for his grandmother's payment. If someone else can claim an exemption for Dan, no one will be allowed a deduction for Ms. Baker's payment.
The maximum tuition and fees deduction in 2014 is $4,000, $2,000, or $0, depending on the amount of your MAGI. See Effect of the Amount of Your Income on the Amount of Your Deduction , later.
If your MAGI is not more than $65,000 ($130,000 if you are married filing jointly), your maximum tuition and fees deduction is $4,000. If your MAGI is larger than $65,000 ($130,000 if you are married filing jointly), but is not more than $80,000 ($160,000 if you are married filing jointly), your maximum deduction is $2,000. No tuition and fees deduction is allowed if your MAGI is larger than $80,000 ($160,000 if you are married filing jointly).
Foreign earned income exclusion,
Foreign housing exclusion,
Foreign housing deduction,
Exclusion of income by bona fide residents of American Samoa, and
Exclusion of income by bona fide residents of Puerto Rico.
|IF your filing status is...||AND your MAGI is...||THEN your maximum tuition and fees deduction is...|
head of household, or qualifying widow(er)
|not more than $65,000||$4,000.|
|more than $65,000
but not more than $80,000
|more than $80,000||$0.|
|married filing joint return||not more than $130,000||$4,000.|
|more than $130,000
but not more than $160,000
|more than $160,000||$0.|
You claim a tuition and fees deduction by completing Form 8917 and submitting it with your Form 1040 or Form 1040A. Enter the deduction on Form 1040, line 34, or Form 1040A, line 19. A filled-in Form 8917 is shown at the end of this chapter.
Tim Pfister, a single taxpayer, enrolled full-time at a local college to earn a degree in engineering. This is the first year of his postsecondary education. During 2014, he paid $3,600 for his qualified 2014 tuition expense. Both he and the college meet all of the requirements for the tuition and fees deduction. Tim's total income (Form 1040, line 22) and MAGI are $26,000. He figures his deduction of $3,600 as shown on Form 8917, later.
Use this worksheet if you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from sources within Puerto Rico. Before using this worksheet, you must complete Form 1040, lines 7 through 33, and figure any amount to be entered on the dotted line next to line 36.
|1.||Enter the amount from Form 1040, line 22||1.|
|2.||Enter the total from Form 1040, lines 23 through 33||2.|
|3.||Enter the total of any amounts entered on the dotted line next to Form 1040, line 36||3.|
|4.||Add lines 2 and 3||4.|
|5.||Subtract line 4 from line 1||5.|
|6.||Enter your foreign earned income exclusion and/or housing
exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)
|7.||Enter your foreign housing deduction (Form 2555, line 50)||7.|
|8.||Enter the amount of income from Puerto Rico you are excluding||8.|
|9.||Enter the amount of income from American Samoa you are
excluding (Form 4563, line 15)
|10.||Add lines 5 through 9. This is your modified adjusted gross income||10.|
|Note. If the amount on line 10 is more than $80,000 ($160,000 if married filing jointly),
you cannot take the deduction for tuition and fees.
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