Education Tax Benefits

For 2021, the tuition and fees deduction is gone, but you might benefit from the lifetime learning credit if your income is below $90,000 ($180,000 if MFJ), which matches the income limitations for the American opportunity tax credit. Furthermore, COVID-19 emergency financial aid grants under the CARES Act are excluded from gross income, but qualified education expenses paid with these tax-free grants can still be used to claim an education credit. Bring in your tuition statements at tax time so we can claim the maximum credit using all eligible expenses.

There’s also a special rule for student loans discharged in 2021 through 2025. For certain types of loans, you can exclude the debt discharge from gross income. Contact our office so we can determine if your student loan qualifies for this exclusion.

This article carries no official authority, and its contents should not be acted upon without professional advice. For more information about this topic, please contact our office.

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