How to Recover Tuition in a Tax Refund
When you pay college tuition, the money you put toward your education can be used to reduce your tax bill or earn you an income tax refund. The individual who paid the tuition is eligible to receive the tax deduction on her taxes. For instance, if you are still claimed as a dependent by your parents and they paid your tuition, they are eligible to receive the tuition deduction. Speak to your accountant if you have any questions about credits and deductions for college tuition.
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Determine what federal income tax credits you are eligible to claim to recover your tuition payments. The Lifetime Learning Credit allows you to receive reimbursement for up to $2,000 per year as of 2011 for tuition and fees paid for attendance to a post-secondary institution. Income limits are $60,000 for single filers and $120,000 for joint filers, according to the Internal Revenue Service. The American Opportunity Credit permits you to claim up to $2,500 in tuition costs as of 2011. Income limits are $90,000 for single filers and $180,000 for joint filers. Form 8863 must be submitted with your Form 1040 to receive the Lifetime Learning Credit or American Opportunity Grant.
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Claim the tuition as a deduction. If you do not claim the Lifetime Learning Credit or American Opportunity Credit, you have the opportunity to claim tuition paid as a deduction on your federal income tax return. As of 2011, you are permitted to claim up to $4,000 in tuition payments on your federal tax return. Report the information provided on Form 1098-T given to you by your college on your tax return to figure out your eligible deduction.
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Find out if you are eligible for state tax credits for tuition. For instance, South Carolina offers a college tax credit if you are a resident of the state and attend a state college or university. As of 2011, the tax credit is 25 percent of actual tuition paid during the tax year.
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