Tax Savings for Education Expenses

State and federal government tax benefits help make higher education affordable. Read more from the IRS website about Tax Benefits for Education: Information Center and download this IRS pdf Tax Benefits for Education to determine if you qualify!

Consider using the IRS Interactive Tax Assistant to help you determine whether you are eligible to claim an Education Credit or take a deduction for Student Loan Interest.

529 Plans

The NC 529 Plan offers multiple investment options with varying degrees of risk and potential rates of return. Earnings are tax-free when used to pay for education expenses. Nearly anyone can set up accounts and can use the funds to pay educational expenses at most any college in the country, as well as some tuition expenses for K-12 tuition. Funds not used by the designated student can be transferred to another relative. Non-North Carolinians should check with their home state about tax or other benefits associated with investing in its own qualified tuition plan.

Learn more about why the NC 529 Plan is a great way to save for college!

Tax Benefits

The American Opportunity Credit (AOTC) is a credit for qualified education expenses paid for an eligible student for the first four years of higher education. You can get a maximum annual credit of $2,500 per eligible student. If the credit brings the amount of tax you owe to zero, you can have 40 percent of any remaining amount of the credit (up to $1,000) refunded to you.

Learn more about how you qualify for this annual tax credit of up to $2500 per eligible student.

Lifetime Learning Credit

The lifetime learning credit (LLC) is for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution. This credit can help pay for undergraduate, graduate and professional degree courses — including courses to acquire or improve job skills. There is no limit on the number of years you can claim the credit. It is worth up to $2,000 per tax return.

Learn more about the Lifetime Learning Credit.

Student Loan Interest Deduction

Certain taxpayers may take a deduction for the interest they paid on a qualified education loan(s).

Learn more information on who qualifies for this deduction.

Employer-Provided Educational Assistance

Some employers pay for college courses taken by their employees and some or all of that benefit is tax-free to employees!

Learn more here.

Tax Deduction for Tuition and Fees

Certain taxpayers may take deductions for qualified higher education expenses paid during the year.

Learn more details on income qualifications and deduction amounts.