It’s no secret that higher education can be outrageously expensive. From tuition and housing to textbooks and classroom supplies, pursuing post-secondary schooling can take a major chunk out of your bank account. When it comes time for tax season, filling out Form 8917 can help alleviate some of that financial burden by giving you a tuition and fee deduction up to $4,000. That means your taxable income is lower when you need to determine how much you owe.
Have a specific question? Use the links below to jump straight to the answer:
- Who Can Use IRS Form 8917?
- What are Qualified Education Expenses?
- What is the Difference Between IRS Form 8917 and Form 8863?
- How Does Form 1098-T Affect Form 8917?
- What Else Do I Need to Know About Taxes as a Student?
- How Do I Fill Out Form 8917?
Who Can Use IRS Form 8917?
To use Form 8917, you must meet the following requirements:
- You, your spouse, or a dependent you claimed on your tax return was enrolled in a qualified institution in the tax year you are filing for
- Note: A qualified institution is defined as a post-secondary place of learning, meaning the student must have a GED or high school diploma to qualify
- The student was enrolled in at least one course at the qualified institution
- Your modified adjusted gross income is less than $80,000, or $160,000 if you are married and filing jointly
- You are paying for at least part of the school tuition and fees with your own money (i.e. grants and scholarships do not cover the entire amount of tuition)
- No one can claim an exemption for you as his or her dependent
It’s critical to understand that the Form 8917 deduction only includes the amount you pay for tuition and fees that are required for the student to enroll in courses. That means expenses such as dorm charges, meal plans, textbooks, extracurricular activities, and health charges cannot be included when you calculate the tuition and fees deduction.
Academic periods from the previous calendar year and/or the first three months of the year in which you file qualify to be reported on tax Form 8917. If the student withdraws from a class and the school does not give you a refund during that period, you can still include the tuition payments for that class in the deduction.
Additionally, you cannot claim deduction on IRS form 8917 for the same Qualified Educational Expenses you used to obtain tax credits for using Form 8863. Claiming a federal education tax credit on Form 8863 will disqualify you from receiving a deductible through Form 8917.
What are Qualified Education Expenses?
Tuition and other charges related to higher education count as Qualified Education Expenses. There are two types of credits that you can claim to cover these expenses:
American Opportunity Credit
- You can claim tuition and student activity fees only if these fees are required to enroll or attend the school
- You can claim books, supplies, and equipment that is necessary for a class regardless of where you purchase them
Lifetime Learning Credit
- You can claim tuition and student activity fees
- You can claim books, supplies, and equipment that is necessary for a class only if they must be purchased as a condition of enrollment or attendance at the school
Scholarships and grants do not count as Qualified Education Expenses. To learn more about how to determine what tax credits you might qualify for, skip to the section titled How Does Form 1098-T Affect Form 8917?
What is the Difference Between IRS Form 8917 and Form 8863?
When it comes time to decide how to reduce your educational expenses, it’s important to know the difference between Form 8917 and Form 8863.
Form 8917 is a tax deduction, which lowers you taxable income depending on which tax bracket you belong to. This option is often more helpful for high-income households because it lowers the amount of money that can be taxed at a higher rate.
Form 8863 is a tax credit, which gives you a dollar-for-dollar reduction on your income tax. This option is often more appealing to low and middle-income households because it saves you the exact amount of money it offers instead of reducing your payment through a tax bracket percentage.
How Does Form 1098-T Affect Form 8917?
Before you file your annual tax return, the school the student is attending will send you a Form 1098-T to disclose your tuition and fee payments for that year. That information is typically disclosed in Box 1 or Box 2 of the form. This will help you determine whether you can receive a tax credit for Qualified Education Expenses, therefore disqualifying you from claiming a tuition and fee deduction on tax Form 8917 if you choose to receive a credit.
What Else Do I Need to Know About Taxes as a Student?
Whether or not you are qualified to use form 8917, understanding how to file taxes is a critical part of your education. Tax information for students differs based on your financial situation, but the first step is to determine whether you are filing with your parents or are filing independently. Your current employment and schooling status will also affect what level of student tax returns you’ll need to file. Make sure to understand which forms, credits, and deductions you qualify for prior sending in a tax return – it’ll save you a major headache down the road.
How to Fill Out Form 8917?
Below are step-by-step instructions for filling out Form 8917.
If you’re using Form 1040 to declare your income, calculate any write-in adjusts that need to be added to Line 36 of Form 8917. Fill out your personal information on Line 1 parts A and B. Then in part C, input your adjusted qualified expense by taking the tuition and fees you paid and subtracting any tax-free educational assistance you received. You’ll calculate this total for each student whose expenses you’re deducting.
On line 2, total the amount on Line 1 C and write the sum. On line 3, enter the amount from line 22 on Formm 1040 or line 15 on Form 1040A to declare your income. On line 4, enter the total from either:
• Lines 23 through 33 on Form 1040 plus any write-in adjustments entered on the dotted line next to Line 36
• Lines 16 through 18 on Form 1040A
Then on Line 5, subtract Line 4 from Line 3. If the amount is more than $80,000 (or $160,00 for those married filing jointly) don’t go any further because you are not qualified to receive the tuition and fees deduction.
If you do qualify, proceed to Line 6. If the amount on Line 5 is more than $65,000 ($130,000 for married filing jointly) enter whichever number is smallest: the amount on Line 2 or $2,000. If Line 5 is not more than $65,000, go to line 6 and enter whichever number is smallest: the amount on Line 2 or $4,000.
The number on Line 6 is the amount you can receive as your deduction.