This article was updated for Tax Year 2023, last edited on December 21st, 2023.
Qualified education expenses are tuition, fees and other related expenses for an eligible student.
Qualified education expenses must be paid by:
You or your spouse (if filing married jointly)
A student you claim as a dependent on your return
A third party, such as family or friends, but directly to the vendor/school
Funds Used
When paying for eligible educational expenses with cash, a check, a credit card, a debit card, or loan funds, you are able to claim an education credit. Per the IRS, if you pay the expenses with money from a loan, then you take the credit for the year you pay the expenses (not the year you get the loan or the year you repay the loan).
Qualified Education Expenses for Education Credits
A qualified expense is any amount paid for tuition, fees, and other related costs necessary for a qualified student’s enrollment or attendance at a qualified educational institution.
Per the IRS, you must pay the qualified education expenses for an academic period that starts during the tax year or the first three months of the next tax year. Academic periods can be semesters, trimesters, quarters or any other period of study such as a summer school session. Academic periods are determined by the school. For schools that use clock or credit hours and do not have academic terms, the payment period may be treated as an academic period.
Certain credits add additional requirements for expenses to be eligible so be sure to double check the requirements of the specific credit you are claiming.
Examples of Typical Qualifying Expenses
The following are qualifying education expenses:
Tuition
School fees and other related expenses
Activity fees required by the institution for enrollment
For the AOTC, there are additional expenses that qualify:
Books
School-related supplies
Equipment needed for a course of study
More information can be found here regarding eligible expenses.
Examples of Non-Qualifying Expenses
The following are not qualifying education expenses, even if you pay them in order to enroll in or attend the school:
Meals and Lodging
Insurance
Medical costs (including student health fees)
Transportation
See the Education Credit Frequently Asked Question page for more information.
Additional Resources:
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