College Tuition Tax Deduction

The Tuition and Fees deduction allows you to claim deduction for qualified tuition expenses paid during the school year.

Maximum Credit Allowed & Credit Phase Out

The Tuition and Fees Deduction is an above-the-line exclusion from income for up to $4,000 in tuition and fees. The deduction is reduced to $2,000 for taxpayers with income within the income phaseout ranges.

Course material costs can also qualify if paid directly to the college and if they are required for enrollment or attendance.

Expenses paid for academic terms that begin in the first three months of the next tax year can be counted as though they were paid during the current tax year.  

The tuition and fees deduction can be claimed for an unlimited number of years.

The Tuition and Fees Deduction is subject to the following eligibility restrictions:

• The student is not required to be seeking a degree or certificate.
• The student must be enrolled at a college or university that is eligible for Title IV federal student aid.
• The student can be enrolled on a part-time basis.
• The student is eligible even if they were convicted of a federal or state felony drug offense for the sale or possession of a controlled substance.

The income phaseouts are $65,000 to $80,000 (single) and $130,000 to $160,000 (married filing jointly). Taxpayers who file as married filing separately are not eligible. The income phaseouts are not adjusted annually for inflation.

Eligible expenses for the deduction are tuition and fees for the taxpayer, the taxpayer’s spouse, and a dependent. It includes books, supplies, and equipment if paid to the educational institution as a condition of enrollment or attendance. However, costs associated with room and board, student activities, transportation, and other expenses are not permitted.

As with tuition and fees for the college credits, the eligible expenses must be reduced by scholarships that are excludable from income, tax-free employer-provided educational assistance under Section 127, and similar nontaxable benefits (other than gifts or bequests).

The qualified expenses are reduced by any tax-free grants or scholarships, employer-provided educational assistance (Section 127 Plans), veteran’s education benefits, and qualified education expenses deducted elsewhere on the tax return. The Tuition & Fees Deduction cannot be claimed for the same qualified expenses for which the American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit (LLC) is claimed. The Tuition & Fees Deduction cannot be claimed in the same year that a tax-free distribution from a Coverdell Education Savings Account (CESA) or Qualified Tuition (529) Plan is received. However, if the CESA or 529 distributions is elected to be taxable, the Tuition & Fees Deduction can be claimed.