There are a few key things to remember when it comes to what is considered a qualified education expense. Check out our blog post for more information.
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There are many costs associated with getting a post-secondary education, but not all of them are considered qualified expenses. In order to claim the Education and Textbook Tax Credits, you can only include expenses that qualify. To help you understand what is and isn’t considered a qualified education expense, we’ve put together this guide.
Qualified Education Expenses
There are a lot of questions when it comes to what can be considered a qualified education expense. The IRS has a few stipulations when it comes to what can and cannot be included in this category. Let’s take a look at a few examples of qualified education expenses.
Tuition and Fees
Tuition and fees required for enrollment or attendance at an eligible educational institution are qualified expenses. These expenses also include amounts paid to the institution for courses taken to acquire or improve job skills.
books, supplies, and equipment that are required for a course of study, whether purchased from the educational institution or elsewhere qualified expenses.
Room and Board
In addition to tuition and fees, room and board are qualified education expenses for the purposes of the American Opportunity Tax Credit and the Lifetime Learning Credit. For the AOTC, expenses for room and board are qualified only if you are attending school at least half-time. The Lifetime Learning Credit has no minimum attendance requirement, so expenses for room and board qualify even if you are attending school less than half-time.
To qualify as a student for purposes of the education tax credits, you must be enrolled in a degree or certificate program at an eligible educational institution. Eligible institutions include colleges, universities, vocational schools, and other postsecondary educational institutions that are accredited by a recognized accrediting agency or organization.
Books and Supplies
Books and supplies include items such as textbooks, handbooks, workbooks, software, and computer equipment needed for a course of study.
Other Qualified Education Expenses
Other qualified education expenses are fees and other expenses charged by the school for attendance, such as student activity fees, and expenses for books, supplies, and equipment needed for a course of study.
There are a wide variety of qualified education expenses that can be used when claiming the American Opportunity Tax Credit or the Lifetime Learning Tax Credit. These include tuition, required fees, and course-related expenses such as books, supplies, and equipment. Additionally, certain expenses related to special needs students may also qualify. To be eligible, the expense must be incurred during the tax year for which the credit is being claimed.