Is college tuition tax deductible? Yes, you can reduce your taxable income by up to $4,000
- Some college tuition and fees are deductible on your 2020 tax return.
- The deduction is worth either $4,000 or $2,000, depending on your income and filing status.
- You can claim the deduction without itemizing, but cannot also claim other education tax credits.
- This article was reviewed for accuracy and clarity by Michele Cagan, an expert on Personal Finance Insider's tax review board.
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Americans can deduct qualified college tuition costs on their 2020 tax returns.
The college tuition and fees deduction was set to expire in 2019, but an 11th-hour spending bill passed that December renewing the provision through the 2020 tax year.
That means if you covered any of the costs of a degree program for yourself, your spouse, or your dependent last year, you could be eligible to reduce your taxable income by up to $4,000. The deduction is taken above-the-line, meaning you don't have to itemize deductions to claim it.
Your eligibility for claiming the tuition and fees deduction depends, in part, on your modified adjusted gross income (MAGI) and filing status.
Here's how much the deduction is worth:
- If your MAGI was less than $65,000 as a single filer
- If your MAGI was less than $130,000 as a married joint filer
- If your MAGI was between $65,000 and $80,000 as a single filer
- If your MAGI was between $130,000 and $160,000 as a married joint filer
- If your MAGI was more than $80,000 as a single filer
- If your MAGI was more than $160,000 as a married joint filer
Married couples filing separately are not eligible for the tuition and fees deduction.
What does the tuition and fees deduction include?
Expenses covered under the deduction include anything related to coursework, including tuition, books, supplies, equipment, and activity fees that must be paid to the school as a condition of enrollment. Costs related to room and board, insurance, student health fees, transportation, or other personal living expenses are not eligible for the deduction.
If you maintain a 529 college savings plan and took distributions to pay for college expenses in 2020, you may still be able to claim the tuition and fees deduction, as long as the expenses you're deducting were not paid for using those funds. Expenses that were paid for using a scholarship, grant, or employer assistance cannot be deducted.
Also, you cannot claim the education-related federal tax credits — The American Opportunity Tax Credit and The Lifetime Learning Tax Credit — in conjunction with the tuition and fees deduction.
You'll find more information about the qualified education expenses you paid for the year on Form 1098-T, which colleges and universities typically send to students by early February following the tax year.
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