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IRS.gov Website
Publication 17
taxmap/pub17/p17-099.htm#en_us_publink100049276

Tuition and Fees Deduction(p137)

rule
You may be able to deduct qualified education expenses paid during the year for yourself, your spouse, or your dependent(s). You can't 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.
taxmap/pub17/p17-099.htm#en_us_publink100049277
What is the tax benefit of the tuition and fees deduction? (p138)
The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000.
This deduction is claimed as an adjustment to income. This means you can claim this deduction even if you don't itemize deductions on Schedule A (Form 1040). This deduction may be beneficial to you if you don't qualify for the American opportunity or lifetime learning credit.
Deposit
You can choose the education benefit that will give you the lowest tax. You may want to compare the tuition and fees deduction to the education credits. See chapter 35 for more information on the education credits.
Table 19-2 summarizes the features of the tuition and fees deduction.
taxmap/pub17/p17-099.htm#en_us_publink100049279

Can You Claim the Deduction?(p138)

rule
The following rules will help you determine if you can claim the tuition and fees deduction.
taxmap/pub17/p17-099.htm#en_us_publink100049280

Who Can Claim the Deduction?(p138)

rule
Generally, you can claim the tuition and fees deduction if all three of the following requirements are met.
  1. You pay qualified education expenses of higher education.
  2. You pay the education expenses for an eligible student.
  3. The eligible student is yourself, your spouse, or your dependent for whom you claim an exemption (defined in chapter 3) 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.
Table 19-2. Tuition and Fees Deduction at a Glance
Don't rely on this table alone. Refer to the text for complete details.
QuestionAnswer
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:
• you,
• 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.
taxmap/pub17/p17-099.htm#en_us_publink100049282

Who Can't Claim the Deduction?(p138)

rule
You can't claim the tuition and fees deduction if any of the following apply.
taxmap/pub17/p17-099.htm#en_us_publink100049283

What Expenses Qualify?(p138)

rule
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 2016 in connection with enrollment at an institution of higher education during 2016 or for an academic period beginning in 2016 or in the first 3 months of 2017.
taxmap/pub17/p17-099.htm#en_us_publink100049284

Academic period. (p138)

rule
An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. If an educational institution uses credit hours or clock hours and doesn't have academic terms, each payment period can be treated as an academic period.
taxmap/pub17/p17-099.htm#en_us_publink100049285

Paid with borrowed funds. (p138)

rule
You can claim a tuition and fees deduction for qualified education expenses paid with the proceeds of a loan. Use the expenses to figure the deduction for the year in which the expenses are paid, not the year in which the loan is repaid. Treat loan disbursements sent directly to the educational institution as paid on the date the institution credits the student's account.
taxmap/pub17/p17-099.htm#en_us_publink100049286

Student withdraws from class(es).(p138)

rule
You can claim a tuition and fees deduction for qualified education expenses not refunded when a student withdraws.
taxmap/pub17/p17-099.htm#en_us_publink100049287

Qualified Education Expenses(p138)

rule
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.
taxmap/pub17/p17-099.htm#en_us_publink100049288

Eligible educational institution. (p138)

rule
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. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions.
An eligible educational institution also includes certain educational institutions located outside the United States that are eligible to participate in a student aid program administered by the U.S. Department of Education.
Deposit
The educational institution should be able to tell you if it is an eligible educational institution.
taxmap/pub17/p17-099.htm#en_us_publink100049290

Related expenses. (p138)

rule
Student activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance.
taxmap/pub17/p17-099.htm#en_us_publink100049291

Prepaid expenses. (p138)

rule
Qualified education expenses paid in 2016 for an academic period that begins in the first 3 months of 2017 can be used in figuring an education credit for 2016 only. See Academic period, earlier.
EIC
You can't use any amount you paid in 2015 or 2017 to figure the qualified education expenses you use to figure your 2016 education credit(s).
taxmap/pub17/p17-099.htm#en_us_publink100049294

No Double Benefit Allowed(p138)

rule
You can't do any of the following.
taxmap/pub17/p17-099.htm#en_us_publink100049296

Adjustments to Qualified Education Expenses(p139)

rule
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.
taxmap/pub17/p17-099.htm#en_us_publink100049298

Tax-free educational assistance. (p139)

rule
For tax-free educational assistance received in 2016, reduce the qualified education expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. See Academic period, earlier.
Some tax-free educational assistance received after 2016 may be treated as a refund of qualified education expenses paid in 2016. This tax-free educational assistance is any tax-free educational assistance received by you or anyone else after 2016 for qualified education expenses paid on behalf of a student in 2016 (or attributable to enrollment at an eligible educational institution during 2016).
If this tax-free educational assistance is received after 2016 but before you file your 2016 income tax return, see Refunds received after 2016 but before your income tax return is filed, later. If this tax-free educational assistance is received after 2016 and after you file your 2016 income tax return, see Refunds received after 2016 and after your income tax return is filed, later.
This tax-free educational assistance includes:
Generally, any scholarship or fellowship grant is treated as tax free. However, a scholarship or fellowship grant isn't treated as tax free to the extent the student includes it in gross income (the student may or may not be required to file a tax return for the year the scholarship or fellowship grant is received) and either of the following is true.
Deposit
You may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year it is received. For details, see Adjustments to Qualified Education Expenses in chapter 35.
taxmap/pub17/p17-099.htm#en_us_publink100049304

Refunds. (p139)

rule
A refund of qualified education expenses may reduce adjusted qualified education expenses for the tax year or require repayment (recapture) of a credit claimed in an earlier year. Some tax-free educational assistance received after 2016 may be treated as a refund. See Tax-free educational assistance, earlier.
taxmap/pub17/p17-099.htm#en_us_publink100049305

Refunds received in 2016. (p139)

rule
For each student, figure the adjusted qualified education expenses for 2016 by adding all the qualified education expenses for 2016 and subtracting any refunds of those expenses received from the eligible educational institution during 2016.
taxmap/pub17/p17-099.htm#en_us_publink100049306

Refunds received after 2016 but before your income tax return is filed. (p139)

rule
If anyone receives a refund after 2016 of qualified education expenses paid on behalf of a student in 2016 and the refund is paid before you file an income tax return for 2016, the amount of qualified education expenses for 2016 is reduced by the amount of the refund.
taxmap/pub17/p17-099.htm#en_us_publink100049307

Refunds received after 2016 and after your income tax return is filed. (p139)

rule
If anyone receives a refund after 2016 of qualified education expenses paid on behalf of a student in 2016 and the refund is paid after you file an income tax return for 2016, you may need to repay some or all of the credit. See Credit recapture, later.
taxmap/pub17/p17-099.htm#en_us_publink100049308

Coordination with education savings bonds, Coverdell education savings account, and qualified tuition programs. (p139)

rule
Reduce your qualified education expenses by any qualified education expenses used to figure the exclusion from gross income of (a) interest received under an education savings bond program, or (b) any distribution from a Coverdell education savings account or 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.
taxmap/pub17/p17-099.htm#en_us_publink100049309

Credit recapture. (p139)

rule
If any tax-free educational assistance for the qualified education expenses paid in 2016 or any refund of your qualified education expenses paid in 2016 is received after you file your 2016 income tax return, you must recapture (repay) any excess credit. You do this by refiguring the amount of your adjusted qualified education expenses for 2016 by reducing that amount by the amount of the refund or tax-free educational assistance. You then refigure your education credit(s) for 2016 and figure the amount by which your 2016 tax liability would have increased if you had claimed the refigured credit(s). Include that amount as an additional tax for the year the refund or tax-free assistance was received.
taxmap/pub17/p17-099.htm#en_us_publink100049310

Amounts that don't reduce qualified education expenses. (p139)

rule
Don't reduce qualified education expenses by amounts paid with funds the student receives as:
Don't reduce the qualified education expenses by any scholarship or fellowship grant reported as income on the student's tax return in the following situations.
taxmap/pub17/p17-099.htm#en_us_publink100049311

Expenses That Don't Qualify(p139)

rule
Qualified education expenses don't include amounts paid for:
This is true even if the amount must be paid to the institution as a condition of enrollment or attendance.
taxmap/pub17/p17-099.htm#en_us_publink100049312

Sports, games, hobbies, and noncredit courses. (p139)

rule
Qualified education expenses generally don't include expenses that relate to any course of instruction or other education that involves sports, games or hobbies, or any noncredit course. However, if the course of instruction or other education is part of the student's degree program, these expenses can qualify.
taxmap/pub17/p17-099.htm#en_us_publink100049313

Comprehensive or bundled fees. (p140)

rule
Some eligible educational institutions combine all of their fees for an academic period into one amount. If you don't receive, or don't have access to, an allocation showing how much you paid for qualified education expenses and how much you paid for personal expenses, such as those listed above, contact the institution. The institution is generally required to make this allocation and provide you with the amount you paid (or were billed) for qualified education expenses on Form 1098-T. See Figuring the Deduction, later, for more information about Form 1098-T.
taxmap/pub17/p17-099.htm#en_us_publink100049314

Who Is an Eligible Student?(p140)

rule
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).
taxmap/pub17/p17-099.htm#en_us_publink100049315

Who Can Claim a Dependent's Expenses?(p140)

rule
Generally, in order to claim the tuition and fees deduction for qualified education expenses for a dependent, you must:
  1. Have paid the expenses, and
  2. 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.
taxmap/pub17/p17-099.htm#table19-3.whocanclaimadependentsexp-7182d80a

Table 19-3. Who Can Claim a Dependent's Expenses

Don't rely on this table alone. Refer to the text for complete details.

IF your dependent is an eligible student and you...AND...THEN...
claim an exemption for your dependentyou paid all qualified education expenses for your dependentonly you can deduct the qualified education expenses that you paid. Your dependent can't take a deduction.
claim an exemption for your dependentyour dependent paid all qualified education expensesno one is allowed to take a deduction.
don't claim an exemption for your dependentyou paid all qualified education expensesno one is allowed to take a deduction.
don't claim an exemption for your dependentyour dependent paid all qualified education expensesno one is allowed to take a deduction.
taxmap/pub17/p17-099.htm#en_us_publink100049316

Expenses paid by dependent. (p140)

rule
If your dependent pays qualified education expenses, no one can take a tuition and fees deduction for those expenses. Neither you nor your dependent can deduct the expenses. For purposes of the tuition and fees deduction, you aren't treated as paying any expenses actually paid by a dependent for whom you or anyone other than the dependent can claim an exemption. This rule applies even if you don't claim an exemption for your dependent on your tax return.
taxmap/pub17/p17-099.htm#en_us_publink100049317

Expenses paid by you. (p140)

rule
If you claim an exemption for a dependent who is an eligible student, only you can include any expenses you paid when figuring your tuition and fees deduction.
taxmap/pub17/p17-099.htm#en_us_publink100049318

Expenses paid under divorce decree. (p140)

rule
Qualified education expenses paid directly to an eligible educational institution for a student under a court-approved divorce decree are treated as paid by the student. Only the student would be eligible to take a tuition and fees deduction for that payment, and then only if no one else could claim an exemption for the student.
taxmap/pub17/p17-099.htm#en_us_publink100049319

Expenses paid by others. (p140)

rule
Someone other than you, your spouse, or your dependent (such as a relative or former spouse) may make a payment directly to an eligible educational institution to pay for an eligible student's qualified education expenses. In this case, the student is treated as receiving the payment from the other person and, in turn, paying the institution. If you claim, or can claim, an exemption on your tax return for the student, you aren't considered to have paid the expenses and you can't deduct them. If the student isn't a dependent, only the student can deduct payments made directly to the institution for his or her expenses. If the student is your dependent, no one can deduct the payments.
taxmap/pub17/p17-099.htm#en_us_publink100049320

Tuition reduction. (p140)

rule
When an eligible educational institution provides a reduction in tuition to an employee of the institution (or spouse or dependent child of an employee), the amount of the reduction may or may not be taxable. If it is taxable, the employee is treated as receiving a payment of that amount and, in turn, paying it to the educational institution on behalf of the student. For more information on tuition reductions, see Qualified Tuition Reduction in chapter 1 of Pub 970.
taxmap/pub17/p17-099.htm#en_us_publink100049321

Figuring the Deduction(p140)

rule
The maximum tuition and fees deduction in 2016 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.
taxmap/pub17/p17-099.htm#en_us_publink100049322

Form 1098-T. (p140)

rule
To help you figure your tuition and fees deduction, the student may receive Form 1098-T. Generally, an eligible educational institution (such as a college or university) must send Form 1098-T (or acceptable substitute) to each enrolled student by January 31, 2017. An institution may choose to report either payments received (box 1), or amounts billed (box 2), for qualified education expenses. However, the amount on Form 1098-T, boxes 1 and 2, might be different from what you paid. When figuring the deduction, use only the amounts you paid in 2016 for qualified education expenses.
In addition, Form 1098-T should give other information for that institution, such as adjustments made for prior years, the amount of scholarships or grants, reimbursements or refunds, and whether the student was enrolled at least half-time or was a graduate student.
The eligible educational institution may ask for a completed Form W-9S or similar statement to obtain the student's name, address, and taxpayer identification number.
taxmap/pub17/p17-099.htm#en_us_publink100049323

Effect of the Amount of Your Income on the Amount of Your Deduction(p140)

rule
If your MAGI isn't 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 isn't 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).
taxmap/pub17/p17-099.htm#en_us_publink100049324

Modified adjusted gross income (MAGI).(p140)

rule
For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return before subtracting any deduction for tuition and fees. However, as discussed below, there may be other modifications.
taxmap/pub17/p17-099.htm#en_us_publink100049325
MAGI when using Form 1040A. (p140)
If you file Form 1040A, your MAGI is the AGI on line 22 of that form, figured without taking into account any amount on line 19 (tuition and fees deduction).
taxmap/pub17/p17-099.htm#en_us_publink100049326
MAGI when using Form 1040. (p140)
If you file Form 1040, your MAGI is the AGI on line 38 of that form, figured without taking into account any amount on line 34 (tuition and fees deduction) or line 35 (domestic production activities deduction), and modified by adding back any:
  1. Foreign earned income exclusion,
  2. Foreign housing exclusion,
  3. Foreign housing deduction,
  4. Exclusion of income by bona fide residents of American Samoa, and
  5. Exclusion of income by bona fide residents of Puerto Rico.
Table 19-4 shows how the amount of your MAGI can affect your tuition and fees deduction.
You can use Worksheet 6-1 in chapter 6 of Pub. 970 to figure your MAGI.
Table 19-4. Effect of MAGI on Maximum Tuition and Fees Deduction
IF your filing status is...AND your MAGI is...THEN your maximum tuition and fees deduction is...
single, head of household, or qualifying widow(er)not more than $65,000$4,000.
more than $65,000 but not more than $80,000$2,000.
more than $80,000$0.
married filing joint returnnot more than $130,000$4,000.
more than $130,000 but not more than $160,000$2,000.
more than $160,000$0.
taxmap/pub17/p17-099.htm#en_us_publink100049328

Claiming the Deduction(p141)

rule
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.