If you have a child in private school, those tuition expenses can quickly add up. You may be wondering whether there's a way to get some of those tuition expenses covered through deductions on your tax return.
There's no federal private school tuition tax deduction, though some states do offer state tax relief for parents paying tuition. You can also, as of 2018, use a 529 plan for private school, and there are other tax benefits for college tuition, some after-school programs and medically necessary therapeutic schools.
Your Private School Bill and Your Taxes
Ordinarily, if you are paying a private school tuition bill, you can't get a federal tax credit or deduction for that money.
Some states, however, do offer tax rebates or other programs to help parents pay for private school tuition, though these programs may be limited to students with family incomes below a certain threshold, students with disabilities or students who'd otherwise attend poorly performing public schools. Check with your state or school district to see what programs are available.
Additionally, if your child attends preschool or some after-school programs, you may be eligible for a tax benefit through the Child and Dependent Care tax credit. This generally covers up to $3,000 for one child, or up to $6,000 for two or more children, to receive care while you work or you seek work. Use IRS Form 2441 to claim the credit on your taxes.
If your child moves from high school to college or vocational school, there are also a variety of programs letting you take tax credits and deductions to cover tuition and other expenses. The American Opportunity tax credit and Lifetime Learning credit can both offer tax relief if you or a spouse or dependent is attending a postsecondary school. Use IRS Form 8863 to see which of these credits you can receive and file for them.
There is also a separate tuition and fees deduction that can reduce your taxable income by up to $4,000 based on tuition and fees for college and vocational school depending on your income and college expenses for you, your spouse or dependents. You can take this deduction even if you don't itemize, but you can't take it if you also claim one of the college tuition credits.
Exceptions for Therapeutic Schools
In some cases, if your child has a disability, you may also be able to claim a specialized school as a medical expense. Generally, the disability must be diagnosed by a physician and the school must be offering a program to treat the disability or otherwise help the child with it.
The deduction for medical and dental expenses is limited to expenses for yourself, your spouse and your dependents that exceed 7.5 percent of your adjusted gross income, and you must itemize your deductions to claim medical expenses. That means that depending on your other expenses and deductions, you may not benefit from this deduction even if your child attends a medically necessary school.
2018 Tax Law Changes and 529 Plans
As of tax year 2018, you can use 529 plans to pay for elementary and secondary tuition as well as college tuition. These plans generally allow you to save money for yourself or a loved one. You pay federal tax on money you put into the plan, but not on the interest and other income it earns while invested. Many states also offer additional tax incentives for using the plans.
Since the money grows without interest, many people opt to keep money in the plans as long as possible, so they may prefer to hold on to funds in the plans for college tuition rather than use them for elementary or high school payments if they can afford to do so. You can generally withdraw up to $10,000 per student per year for elementary and high school tuition.
2017 Tax Law
Under 2017 tax law, you can't use 529 plans for elementary and secondary education.
On the other hand, the standard deduction is lower in 2017 than in 2018, which may make it worthwhile to itemize and claim medical deductions for therapeutic schools in cases where it would not be as of 2018. In 2017, the standard deduction is $6,350 for a single filer and $12,700 for a married couple filing jointly, while in 2018 these numbers rise to $12,000 for single filers and $24,000 for married couples filing jointly.
- National Council of State Legislatures: Interactive Guide to School Choice Laws
- IRS: Topic Number 602 - Child and Dependent Care Credit
- IRS: Instructions for Form 2441 (2017)
- Learning Disabilities Association of America: Special Education Expenses – Tax Deductible or Not?
- IRS: Topic Number 502 - Medical and Dental Expenses
- IRS: Tax Benefits for Education: Information Center
- The Motley Fool: Your 2018 Guide to College Tuition Tax Breaks
- SEC: An Introduction to 529 Plans
- The Washington Post: You Can Now Use a 529 to Pay for K-12 Tuition — So Should You?
- Forbes: New: IRS Announces 2018 Tax Rates, Standard Deductions, Exemption Amounts And More
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