Tax question - Concurrent enrollment tuition credits

[HSmomNY]

Okay, folks.

Background. My son is a high school junior being homeschooled in NY. He took an online college class with BYU- Idaho last year(2011).

Question – can I deduct the tuition on my federal and/or state taxes?

My hope is that someone has faces this before and can give me some information.

Thanks

[regentrude]

Here is a link that explains the tax deductions.

http://www.irs.gov/publications/p970/ch06.html#en_US_2010_publink1000178363

 

"Who Is an Eligible Student For purposes of the tuition and fees deduction, an eligible student is a student who is enrolled in one or more courses at an eligible educational institution (as defined under Qualified Education Expenses , earlier). The student must have either a high school diploma or a General Educational Development (GED) credential."

 

 

I take that to mean that dual enrollment while in high school would not qualify.

 

I'll be very happy to be proven wrong ;-)

[Jann in TX]

No tax credit for dual enrollment students in Texas

[Julie in MN]

K-12 isn't deductible on the fed, as far as I know.

 

States vary. In Minnesota, there is an education credit and an education subtraction: http://taxes.state.mn.us/individ/pages/credits_subtractions_additions_education_credits_subtractions_educ_credit_sub.aspx

 

Julie

[Lori D.]

Probably not a help here at all, as this is a slight tangent, BUT...

 

Do you have any educational bonds or an educational IRA? Those can (usually) be used to pay for a high school student's tuition fees. (DO CHECK your specific plan, however, as these have varying rules about the what/when/who is covered.)

 

HOWEVER, downside for you -- the reimbursement must happen in the same calendar year as when the tuition was paid. (Yours was in 2011, so if you did not cash the bonds or transfer of funds from the IRA account in 2011, you can't do so now in 2012.) AND you need to keep receipts (from the school for the amounts) for tax purposes for the following year's tax return so you won't be charged tax on those educational reimbursed funds.

 

Here was a past thread on the topic of government educational bonds, with links to websites with specific regulations, calculators, etc.

 

BEST of luck! Warmly, Lori D.

[Sebastian (a lady)]

Probably not a help here at all, as this is a slight tangent, BUT...

 

Do you have any educational bonds or an educational IRA? Those can (usually) be used to pay for a high school student's tuition fees. (DO CHECK your specific plan, however, as these have varying rules about the what/when/who is covered.)

 

HOWEVER, downside for you -- the reimbursement must happen in the same calendar year as when the tuition was paid. (Yours was in 2011, so if you did not cash the bonds or transfer of funds from the IRA account in 2011, you can't do so now in 2012.) AND you need to keep receipts (from the school for the amounts) for tax purposes for the following year's tax return so you won't be charged tax on those educational reimbursed funds.

 

Here was a past thread on the topic of government educational bonds, with links to websites with specific regulations, calculators, etc.

 

BEST of luck! Warmly, Lori D.

 

So a question about Ed IRAs and other ed accounts to kids (is UGMA or UTMA the acronym I'm looking for).

 

Do you (the parent) pay the tuition and then make a withdrawal from the account to match?

 

We'd like to draw down accounts in the kids' names before they start applying to colleges. So I want to use their money to pay for their OSU German Online tuition. But since there isn't a checkbook associated with those accounts, it can't be paid directly.

 

Am I making it harder than it really is?

[Lori D.]

Do you (the parent) pay the tuition and then make a withdrawal from the account to match?

 

 

That's how ours works.

 

DH first called and asked our particular educational IRA institution what the process was; it involved setting up an online account, and for the first time for the reimbursement, we faxed them bank account documents and they sent a physical check; after that, we have been able to make the reimbursement (from IRA to the bank account specified when we set up the account), and do so ourselves, electronically, by accessing the account DH created.

 

The educational savings bonds have to be cashed at a bank, and at the end of the year, you receive a statement declaring the value of the bonds you have cashed and that it needs to be declared as income on the tax return. The tax return form allows you to deduct this amount -- IF you have receipts to show you used it in that same year for legally allowable educational purposes (for the government bonds, it's pretty much JUST tuition and fees -- NOT books, and no room/board, transportation, etc.).

 

 

This whole process sets my teeth on edge with anxiety that somehow we have screwed up and will still have to pay the interest earned on the IRA or bonds... :eek: So, be SURE to check with your OWN institution and an accountant to verify WHAT is an allowable reimbursement, HOW to set up an account/reimburse, etc.

 

BEST of luck! Warmest regards, Lori D.

[Tohru]

I was under the impression that one could take the lifetime learning credit for a dependent if they received a 1098-T form from the school and meet the income and other guidelines.

 

http://www.irs.gov/newsroom/article/0,,id=218389,00.html

http://www.irs.gov/pub/irs-pdf/p970.pdf

[HSmomNY]

Okay I call the IRS.... Long Wait on hold....... 1 hour latter the IRS representative told me that my son tuition for college classes was eligible for the life time learning credit. Yah!

:)

[Quiver0f10]

I was under the impression that one could take the lifetime learning credit for a dependent if they received a 1098-T form from the school and meet the income and other guidelines.

 

http://www.irs.gov/newsroom/article/0,,id=218389,00.html

http://www.irs.gov/pub/irs-pdf/p970.pdf

 

Okay I call the IRS.... Long Wait on hold....... 1 hour latter the IRS representative told me that my son tuition for college classes was eligible for the life time learning credit. Yah!

:)

 

 

I had the same question but use Turbo tax. The rep also told me it qualified.

[Tohru]

Okay I call the IRS.... Long Wait on hold....... 1 hour latter the IRS representative told me that my son tuition for college classes was eligible for the life time learning credit. Yah!

:)

 

:hurray: Fantastic!

[Lori D.]

Yippee! :)

[Guest Hsmami]

We took the American Opportunity Credit this year for my 14 year old dual enrolled son. I didn't call the IRS, but based on the flow chart in Pub 970, we thought we qualified for it. The only gray area is this: "was the student enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential for at least one academic period beginning during the tax year?". Although he's not matriculated, I think we can make the argument that these classes will lead to a high school diploma, which is a recognized educational credential.

[Teachin'Mine]

Is it only tuition which qualifies, or does the cost of textbooks apply too?

 

Only if someone happens to know ... :)

[Guest Hsmami]

Textbooks required for college classes are deductible under the Amercian Opportunity Credit, but not the Lifetime Learning Credit.

[Susan C.]

I was told that only the Lifetime credit could be taken with dual enrollment during high school years. And we checked into opening a 529 plan, but that disqualifies you from the American Opportunity Credit (which is a better credit).

[Teachin'Mine]

Textbooks required for college classes are deductible under the Amercian Opportunity Credit, but not the Lifetime Learning Credit.

 

Thank you!

[Guest Hsmami]

I was told that only the Lifetime credit could be taken with dual enrollment during high school years. And we checked into opening a 529 plan, but that disqualifies you from the American Opportunity Credit (which is a better credit).

 

I don't know. My husband is a CPA and we read through Pub 970. He thinks we can make a good case for taking the American Opportunity Credit.