Is private school tuition tax deductible?

By: Gallagher Flinn  | 

Federal tax credits and deductions won't help ease the cost of private school.
Federal tax credits and deductions won't help ease the cost of private school.
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There might be a lot of benefits to sending your child to private school, but when you write that hefty tuition check every year, you could find yourself wondering whether those payments are tax deductible.

Unfortunately, when it comes to your U.S. federal taxes, the short answer is no. If your child attends a K-12 private school, there is no federal tax deduction or credit you qualify for that will help pay for tuition — not even school uniforms. However, once your child graduates and attends a college you're paying for, you'll start qualifying for certain education deductions. Until then, there's not much in the way of tax relief to ease your costs.

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That doesn't mean you're out of luck if you need help paying for private school. Certain states — Alabama, Arizona, Florida, Georgia, Indiana, Iowa, Kansas, Louisiana, New Hampshire, Oklahoma, Pennsylvania, Rhode Island, South Carolina and Virginia — offer state tax credits to fund organizations that distribute private school tuition in the form of scholarships [source: National Conference of State Legislatures].

Corporations and individuals can also send a percentage of the state taxes they owe to these organizations as an alternative to school voucher programs. Generally, the organizations are set up to pay for low-income kids whose household income is below a certain threshold to attend private schools.

Although there are no outright tax credits for private school tuition, there is one way the IRS makes it easier to pay tuition. Parents or guardians can establish a Coverdell Education Savings Account (ESA) to help save for future education expenses without incurring taxes. A Coverdell ESA is a trust or custodial account set up exclusively for paying the designated beneficiary's education expenses. They're similar to a Roth IRA in that the money is invested into mutual funds, stocks and bonds, and both allow annual, tax-free contributions.

While you're limited to investing $2,000 a year, it's tax-free, as are your withdrawals, given you follow certain guidelines. Deposits must be cash only and can be made up until the beneficiary is 18. The money can be used until the child reaches age 30 (after that, taxes and penalties will be applied) [source: Finaid.org].

If you're interested on setting up an account for a particular child, you don't even need to be able to claim the child as a dependent. That means grandparents, uncles and aunts can still contribute to a child's education. You can even fund an existing Coverdell ESA, provided you don't exceed the annual $2,000 limit.

Originally Published: Nov 26, 2014

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Private School Tuition Tax Deductible FAQ

Can I claim my child's private school tuition on my taxes?
You cannot claim or write off your child's private school tuition on your federal tuition. However, some states may allow you to do so on your state tax returns.
Can I claim my child's education expenses on my taxes?
Until your child is in college, you can't claim education expenses in most cases.
Can you deduct school tuition on taxes?
You cannot deduct any school tuition on your taxes as of December 31, 2020.
Is a donation to a private school tax deductible?
Yes, you can claim a donation to a private school on your taxes as a deduction. You will, however, need to itemize your deductions instead of simply taking the standard deduction if you want to deduct more than the $300 allowed under the standard deduction for the 2020 tax year.
Are there any tax benefits for homeschooling?
No, there are no tax benefits available for homeschooling or homeschooling expenses.

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Related Articles

  • Finaid.org. "Coverdell Education Savings Accounts." (Oct. 23, 2014) http://www.finaid.org/savings/coverdell.phtml
  • Internal Revenue Service. "Coverdell Education Savings Accounts." June 18, 2014. (Oct. 23, 2014) http://www.irs.gov/taxtopics/tc310.html
  • Internal Revenue Service. "Tax Benefits for Education: Information Center." Aug. 19, 2014. (Oct. 23, 2014) http://www.irs.gov/uac/Tax-Benefits-for-Education:-Information-Center
  • National Conference of State Legislatures. "Scholarship Tax Credits." (Oct. 23, 2014) http://www.ncsl.org/research/education/school-choice-scholarship-tax-credits.aspx