Higher Education Tax Benefits: Do You Qualify?

Sallie Mae Educates Families About Often-Overlooked Education Tax
Credits and Deductions That Can Help Offset Higher Education Costs

NEWARK, Del.–(BUSINESS WIRE)–It’s tax season and whether you are an undergraduate, graduate student,
taking professional degree courses, or a parent, you may be eligible for
one or more higher education tax credits and deductions. Sallie Mae, the
nation’s saving, planning, and paying for college company, has tips to
help families understand and take advantage of these
sometimes-overlooked benefits.


“Higher education tax deductions and credits are an effective way to
reduce your college costs,” said Martha Holler, senior vice president,
Sallie Mae. “The key is to understand what’s available, determine
eligibility, and take action to ensure no money is left on the table.”

Here’s what families need to know about available higher education tax
benefits:

  • The American opportunity (AOC) tax credit. Students enrolled at
    least half time in a program leading to a degree or other recognized
    educational credential may be eligible for a tax credit of up to
    $2,500 per year in tuition, enrollment fees, and course materials
    expense during the student’s first four years of higher education.
    Single filers with a modified adjusted gross income (MAGI) of up to
    $90,000 and married filers with a MAGI up to $180,000 may qualify for
    this credit.
  • The lifetime learning credit (LLC). Covers up to $2,000 per
    year in expenses related to all years of post-secondary education, as
    well as non-degree courses to acquire or improve job skills, and there
    is no limit on the number of years it may be claimed. For 2018, the
    amount is gradually reduced if MAGI is between $57,000 and $67,000
    ($114,000 and $134,000 if you file a joint return).

    Important
    Note:
    Either the American opportunity credit or the lifetime
    learning credit may be claimed in one tax year, but not both.

  • Student loan interest deduction. Taxpayers with federal or
    private student loans may be eligible to deduct up to $2,500 of
    interest as an adjustment to taxable income. The student must be
    enrolled at least half time in a program leading to a degree or other
    recognized educational credential. Single filers with a MAGI of
    between $65,000 and $80,000, and joint filers with a MAGI between
    $135,000 and $165,000 may qualify for this deduction.

    Important
    Note:
    The tuition and fees deduction expired in 2017.
    Consult
    a tax professional or visit IRS.gov to see if this deduction has been
    extended for 2018.

  • Tuition waivers for graduate students. Graduate students with
    qualified tuition reductions do not have to report the value of the
    reduction as taxable income.
  • Expanded eligibility for 529 savings plans (Qualified Tuition
    Program).
    Beginning Jan. 1, 2018, 529 plan savings may be used for
    qualified education expenses of up to $10,000 per student per year at
    elementary and secondary public, private, or religious schools.

Information in this release is not intended to provide, nor should it be
relied on, for tax, legal, or accounting advice. For more information on
eligibility for higher education tax deductions and credits, consult IRS
Publication 970
, “Tax Benefits for Higher Education,” or a personal
tax advisor.

Find additional information on saving, planning, and paying for college
at SallieMae.com.

Sallie Mae (Nasdaq: SLM) is the nation’s saving, planning, and
paying for college company. Whether college is a long way off or just
around the corner, Sallie Mae offers products that promote responsible
personal finance, including private education loans, Upromise rewards,
scholarship search, college financial planning tools, and online retail
banking. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM
Corporation and its subsidiaries are not sponsored by or agencies of the
United States of America.

Contacts

Antoine L. Oakley
302-451-4916
[email protected]

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