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posted Nov 25, 2019 11:20:37 AM

I'll be forming an education company and I'd like to set it up so that my students would be eligible for the education tax deduction for tuition. Can someone help me?

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2 Replies
Level 15
Nov 25, 2019 2:52:53 PM

There is no longer an actual deduction for education expenses, but there are tax credits. An eligible educational institution, for education tax credits,  is a school offering higher education beyond high school. It is any college, university, trade school, or other post secondary educational institution eligible to participate in a student aid program run by the U.S. Department of Education.

This includes most accredited public, nonprofit and privately-owned–for-profit postsecondary institution.

Reference: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/eligible-educational-inst

 

For more info on making your school eligible, see https://ifap.ed.gov/fsahandbook/attachments/0910FSAHbkVol2Ch1School.pdf

Level 15
Nov 29, 2019 8:58:42 AM

Understand that all higher education institutions (colleges, universities, vocational schools, etc.) are first and foremost, a business. They are in business to make a profit. In order for monies paid to that business to be tax deductible or eligible for any tax credits for those who pay that business, that business must be a "qualified" institution that appears on the IRS list of qualified institutions maintained by the IRS. To see the definition of a qualified institution see https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/eligible-educational-inst

From that page you can also access the the U.S. Federal Aid Code List of qualified institutions.  For guidance on becomming an eligible institution, start at https://ifap.ed.gov/fsahandbook/attachments/0910FSAHbkVol2Ch1School.pdf

Basically, you have to go through the U.S. Dept of Education to start the process. You will not complete the process in one tax year either.