Vocational School Stipend Question

[hieye5]

My son is an electrician apprentice who works on the job site every day except 1 day every other week when he attends classes at the electrical trade center.  He receives reduced wages for that school day, but gets a stipend to basically make up the difference (provided he shows up to school and passes his exams).  Does attending the trade center qualify as "higher education", thus allowing him to deduct his school books as expenses?  Also, this stipend reported on 1099-MISC should NOT be considered self-employment income subject to self-employment taxes, right?

[AmyC]

1. If the purpose is to acquire or improve skills then Trade schools can qualify as higher education if it is an Eligible Educational Institution - Internal Revenue Service. Expenses that are necessary like books are deductible.  Pub 970 states:

Deductible Transportation Expenses

If you are regularly employed and go directly from home to school on a temporary basis, you can deduct the roundtrip costs of transportation between your home and school. This is true regardless of the location of the school, the distance traveled, or whether you attend school on nonwork days.

2. The 1099-MISC is reporting his non-wage income, like a bonus for gong to school. It is not subject to self-employment tax.

Courses to acquire or improve job skills qualify for the Lifetime Learning Credit, but not AOTC. 

See:

•  What education tax credits are available?
•  Pub 970

 

[hieye5]

Amy, this is great info.  Regarding the deduction for miles driven to school, does he enter the info under Job-Related Expenses?  If so, will doing so cause his vehicle to be depreciated?  Any guidance you can provide is greatly appreciated.  Thanks!

[BrittanyS]

Yes, the deduction would be taken under Job-Related Expenses.  You can claim the standard mileage rate and TurboTax will determine the deductible amount based on the mileage driven.  The standard mileage rate is currently $0.67 per mile for 2024.  The mileage is limited to miles driven to and from work to school.  It does not include miles driving from school to home.  The standard mileage rate factors in the depreciation expense.  Since the depreciation expense is included in the calculation for the standard mileage rate, actual expenses are not able to be claimed including deprecation as a separate entry.  For more information see the link below:

• Auto Related Tax Deductions
• Vehicle Expense Deduction