"New" law? - Taxes, Deductions, and Dual Enrollment

[BlsdMama]

Had a discussion with a friend of mine yesterday.  I have always believed NO expenses are deductible (tuition, books AT college) while the child is still a high school student.

She has been told otherwise.  I figured it was worth looking into.

 

I found this site:

http://www.handinhandhomeschool.com/gifted/acceleration/early-college-tax-deduction.php

That claims, "In 2012, the IRS quietly changed it's rule on college tuition deductions. Students are no longer required to have a high school diploma or GED before they can write off a portion of their college costs."

 

So I looked up the source she linked:
https://www.irs.gov/pub/irs-pdf/p970.pdf

 

Is she correct?

 

If a student is attending college and is paying tuition/books (deductible expenses) then can it be counted as a deduction REGARDLESS of the graduation status of the student from high school?  That almost makes it appear so.

 

(Hopeful and skeptical.)
 

[maize]

Based on that IRS publication I can't see any reason the deduction could not be claimed. You might try contacting the IRS to verify.

 

For tax credits, the student is required to be admitted into a degree seeking program--usually this does not happen for dual enrollment. But I see no such requirement for deductions.

[anne1456]

I claimed the tuition and fees deduction for my son last year when he was dual enrolled. It just automatically came up that way when I entered the information, so I assume it is ok.

[mom31257]

Some deductions you can only take for 4 years, so I would not want to take high school dual enrollment fees off if the fees, books, etc., will be much more during the first four years of actual college. 

 

 

[maize]

Here's another finance site that seems to agree that the 2012 changes allow deductions for dual enrollment:http://finance.zacks.com/high-school-college-credit-tuition-tax-deduction-2213.html

[maize]

Some deductions you can only take for 4 years, so I would not want to take high school dual enrollment fees off if the fees, books, etc., will be much more during the first four years of actual college.

I believe this applies to educational credits but not deductions.

[JanetC]

Note that AOTC credits are only good for 4 (tax) years. If you use them up on relatively small bills (like a single DE class) you won't have eligibility when the big bills for the four year school start rolling in.

 

Of course, AOTC is set to expire, so it may not be around for four years anyway. But, it's popular enough that it is likely to be renewed.

 

I believe the AOTC eligibility rules also state "enrolled in a program leading to a degree or certificate" so if you are doing a DE class as a non-matriculated or non-degree-seeking student, read the rules carefully.

[maize]

Note that AOTC credits are only good for 4 (tax) years. If you use them up on relatively small bills (like a single DE class) you won't have eligibility when the big bills for the four year school start rolling in.

 

Of course, AOTC is set to expire, so it may not be around for four years anyway. But, it's popular enough that it is likely to be renewed.

 

I believe the AOTC eligibility rules also state "enrolled in a program leading to a degree or certificate" so if you are doing a DE class as a non-matriculated or non-degree-seeking student, read the rules carefully.

Yes, rules for credits are more stringent.

 

But the OP referenced deductions.

[Sebastian (a lady)]

I found this article from a couple years ago.  http://www.nytimes.com/2012/04/15/education/edlife/now-deduct-this.html?_r=0  It says that the deduction depends on it being a college course, not a post high school student.  US News had a similar article from 2012, when the change was made.

 

This seems to be the form for calculating the tax deduction and determining eligibility.  I don't see that there is a diploma or GED requirement, however there is a maximum Modified Adjusted Gross Income to be able to take the deduction.  (Of course there is.)

https://www.irs.gov/pub/irs-pdf/f8917.pdf

 

 

Edited January 4, 2017 by Sebastian (a lady)

[Pegasus]

I use the lifetime learning credit for dual enrollment expenses and then switch to the AOTC once they start college.  Note that the spring expenses for dual enrollment CAN be added to the fall college expenses for AOTC once they start college as long as the expenses are incurred in the same calendar year.

[SparklyUnicorn]

I took the deduction for my kid.

 

I cannot remember the details, but when I went and did it I read the instructions very carefully.  There was nothing that made me think I should not take it because later on I wouldn't be able to.  So that must refer to something else.

 

 

[BlsdMama]

Looking around, I think this:

 

https://ttlc.intuit.com/questions/2616439-questions-re-high-school-dual-credit-expenses-are-triggering-deduction-and-i-don-t-think-she-s-eligible

 

makes the answer much more clear.

 

And, according to that answer, for high school kids, you can  take EITHER the deduction OR the Lifetime Learning Credit (no max of four years) but NOT the American Opportunity credit, which is fine because, really, the American Opportunity is more generous and, as mentioned by someone else, you'd want to use that when their expenses are higher.

 

Link for Lifetime Learning:

https://www.irs.gov/publications/p970/ch03.html

 

And the IRS link for deductions is in my first post - see the original post link and go to page 38.

Edited January 5, 2017 by BlsdMama