Tips on Tax Credits for Your College Education

Who Can Claim a Tax Credit Deduction?

If you are a student paying your way through college, or paying the expenses of your spouse or a dependent, you may qualify for a tax credit deduction. You may choose only one type of deduction, so be sure to choose the tax benefit that will give you the lowest tax. The deduction is taken from 1040 or 1040A. Qualified expenses include tuition and certain related expenses required for the enrollment or attendance of a qualifying educational institution.

Qualifying institutions include a college, university, vocational school or other post-secondary educational institute approved by the US Department of Education’s Federal Student Aid’s program. If you are attending a higher learning institution located outside the United States, check with the institution to see if it is also eligible. Your eligibility for credit can include the last three months of the year 2012 and the first three months of 2014, for the year 2013, provided you have not previously claimed them. If your institution uses credit hours or clock hours and does not have academic terms, each payment period can count as an academic period.

Determining Your Eligibility

There are four main terms that disqualify you from receiving a tax credit deduction.

  • If your filing status is married, filing separately.
  • Another person claims you as a dependent on his or her tax return. This applies even if the other person does not actually claim the deduction.
  • Your modified adjusted gross income (MAGI) is more than $80,000 or $160,000 if filing a joint return.
  • You or your spouse was a nonresident alien for any part of 2013 and the nonresident did not elect to be treated as a resident alien for tax purposes.

Qualified expenses do not include insurance, medical expenses; including student health fees, room and board, transportation or similar personal living or family expenses. When filing your taxes, remember, grants and scholarships are tax-free and are not considered a part of your income. Other exclusions are employer provided assistance, veteran’s educational assistance, fellowships, and all other non-taxable payments apart from gifts or inheritance.