Tax Benefits
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Tax Benefits
Several federal tax benefits are available to help pay for post-secondary education. These include tax credits, tax deductions and exclusions from gross income.
Additional information on federal tax benefits can be obtained from the Internal Revenue Service by calling (800) 829-3676 or at http://www.irs.gov/formspubs/.
Employer-Paid Tuition Assistance
Employers may provide up to $5,250 per year in educational assistance to each employee on a tax-free basis for undergraduate or graduate course, regardless of whether the education is job related. Visit with your human resources office to learn if your employer provides a qualified program. Your employer will automatically treat the educational assistance as a tax-free benefit and not include it as wages on your W-2 form.
Hope Tax Credit
Taxpayers may claim up to $1,500 per eligible student per year during the first two years of qualified tuition expenses for undergraduate study. The tax credit phases out for joint tax filers between $80,000 and $100,000 of adjusted gross income and for single tax filers between $40,000 and $50,000. The amount is based on qualified tuition and fees minus scholarships, grants and other tax-free educational assistance.
Lifetime Learning Tax Credit
Taxpayers may claim up to $1,000 total per year for all eligible students per family for undergraduate and graduate study. The tax credit phases out for joint tax filers between $80,000 and $100,000 of adjusted gross income and for single tax filers between $40,000 and $50,000. The amount is based on qualified tuition and fees minus scholarships, grants and other tax-free educational expenses. There is no limit on the number of years of eligibility.
Student Loan Interest Deduction
Taxpayers who take loans to pay the price of attending St. Thomas for themselves, their spouse or their dependents may deduct up to $2,500 per student per year for the interest they pay on the loans. The deduction amounts are phased out at modified adjusted gross incomes of $100,000 to $130,000 for married taxpayers filing joint returns and $50,000 to $65,000 for single taxpayers.
