Tag Archives: qualified education expenses

What Is An Eligible Education Institution?

Do I get a tax write off for this?

The IRS provides taxpayers certain tax breaks when you pay for education.  However, there is a catch.  The monies paid (i.e. tuition) have to be to an eligible education institution.  What exactly is that?  Read on my friend.

Tax Benefits Available
The following are the benefits commonly available to taxpayers:

  • Tuition and Fees Deduction: The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000.  You may be able to deduct qualified education expenses for higher education paid during the year for yourself, your spouse or your dependent.
  • American Opportunity Tax Credit: A credit for tuition, required enrollment fees and course material for the first four years of post-secondary education for up to $2,500 per eligible student per year. Your modified adjusted gross income (MAGI) must be under $90,000 ($180,000 for joint filers) and you must not have claimed the AOTC or the former Hope Credit for more than four tax years for the same eligible student. Forty percent of this credit may be refundable.
  • Lifetime Learning Credit: The Lifetime Learning Credit is 20% of the first $10,000 of qualified education expenses paid for all eligible students. The maximum credit is $2,000 per return regardless of the number of eligible students. There is no limit on the number of years the credit can be claimed for each student; thus the reason it is referred to as “lifetime.”

Eligible Education Institution Defined
An eligible educational institution is a school offering higher education beyond high school. It is any college, university, trade school, or other post secondary educational institution eligible to participate in a student aid program run by the U.S. Department of Education.  This includes most accredited public, nonprofit and privately-owned–for-profit post secondary institutions.

With that said, if you are attending a school in another country, there is a possibility that it is NOT considered an eligible education institution.  In general, if you aren’t sure if your school is an eligible educational institution:

• Ask your school (i.e. someone in the financial aid department) if it is, or
• See if your school is on the U.S. Federal Student Aid Code List.

TIP: A small number of schools, not on the list, may be eligible educational institutions and the school can confirm that for you.