Tax Tips for Parents Who Send Children to Private School

Families educate their children by sending them to public schools or private schools or by home-schooling them. Attendance at private school is definitely the most expensive choice. Parents fund private schools without assistance from state or federal governments. Unfortunately, there are not a lot of tax breaks for these parents.

State Credit

Some states offer tax credits or deductions for educational expenses, whether a child attends public, private or home school. In Minnesota, the state offers tax credits and deductions for private school tuition, nonreligious textbooks, computers and other educational supplies. Credits and deductions are granted for enrichment activities before and after school that promote art instruction. These credits are personal-use credits, which lower a family's tax liability.

Before- and After-School Care

Child care costs can be deducted from the tax liability of a parent of a private-school student. If a family pays for before- and after-school care at a private school, this amount can be applied toward the deduction. The child care service must be for children under the age of 13, and the parent must be working or looking for work during the time the child is at the facility.

Educational Savings Accounts

Parents use educational savings accounts to invest money on a tax-free basis for the benefit of their children or grandchildren. The money also can be withdrawn without a tax liability as long as it is used for qualified educational expenses, such as tuition, books, uniforms and other educational fees. Educational savings accounts can be set up for elementary, high-school or college students.

Nondeductible Items

Tuition is the biggest expense for parents who send children to private schools. This bill can easily reach thousands of dollars per year. Private-school tuition is not tax-deductible. Some private schools offer scholarships and financial aid. School uniforms are not tax-deductible, even if the school requires them.

References

• The Center for Education Reform: Just the FAQs -- Tuition Tax Credits and Tax Deductions
• Forbes; 9 Tax Tips for Back to School; Kelly Phillips Erb; August 2011
• Mefford DeLong LLC: Minnesota K-12 Back-to-School Tax Tips
• National Review Online; Supreme Court Allows Tax Credits for Private School Scholarship Donations; Katrina Trinko: April 2011