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Level 1

Can I deduct room & board, and education (schooling) costs for a residential treatment facility?

My son attended the facility, and I am still paying on the loan.
3 Replies
Level 20

Can I deduct room & board, and education (schooling) costs for a residential treatment facility?

It's not clear what you mean by "residential treatment center" and "schooling". 

 

 Residential treatment facility cost s usually deductible as medical expenses,  which  is subject to itemizing deductions and  the 7.5%  of income (AGI) threshold.  You can deduct those expenses, on your tax return,  if your son is your actual dependent or "medical dependent"**. 

 

You may deduct the expenses in the year you paid the facility,  not in the year(s) you paid back the loans.

 

**Medical dependentIf your close relative cannot be your dependent because he had more than $4,200 of gross income, but otherwise would have qualified as your dependent (basically that you & other family members provided more than half his support), then you can include in your deductible medical expenses any qualifying medical expenses you paid on his behalf just as if he was your dependent.

Level 20

Can I deduct room & board, and education (schooling) costs for a residential treatment facility?

Education expenses are deductible for *qualified* education expenses paid to a *qualified" educational institution. If the institution is not on the list of qualified institution (which also includes a number of vocational and trade schools) then the education expenses are not deductible. The list of qualified institutions can be seen on the U.S. Dept of Education's website at https://ope.ed.gov/dapip/#/home

Now understand the only *qualfied* education expenses are tuition, books, and lab fees. Now while the category for lab fees is rather broad, there are no exceptions to that. Room and board is not a qualified education expense any way you look at it. Period.

Now per IRS Publication 970, 529 funds can be used for qualified education expenses *and* for the unqualified expenses of room and board *PROVIDED* the room and board was in *direct support* of the education. 

For example, if a student uses 529 funds to pay room and board expenses for the summer semester, yet was not enrolled as a full time student for that specific semester, then the room and board expenses for that semester are *not* allowed since those expenses for those months was not in "direct support" of the education.

For this to work in your favor, the following criteria must be met.

 - THe student must be enrolled as a full time student for any one semester that started in the tax year and;

 - The student must be enrolled in a course of study that will lead to a degree or credentialed certification and;

 - The school must be an institution accredited by the U.S. Department of Education. 

 

In addition to colleges and universities, this can also include vocational schools and trade schools. While the latter two would not lead to a degree, if the course of study leads to a "credentialed certification" that's what matters. Examples would include Tulsa Welding School, or a vocational course where a student could become a credentialed CNA (Certified Nursing Assistant) upon course completion. Basically, an accredited institution is one that qualifies for federal funds.

So if your dependent is in a treatment facility of some sort, I seriously doubt completion would lead to any kind of "credentialed certification". More than likely what you have "may" be a qualified medical expense which of course, would be subject to the 7.5% minimum of AGI before the deduction would kick in and be of any help or value you to.

 

Level 15

Can I deduct room & board, and education (schooling) costs for a residential treatment facility?

note that the 7.5% was for 2018.... the threshold moves to 10% in 2019.