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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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Regarding Education Deductions on personal income tax. My

Resolved Question:

Regarding Education Deductions on personal income tax. My husband has been going to school part time for a few years now and we have yet to use ANY of the optional educational deductions on our returns, primarily because I don't understand them when financial assistance is involved. He has the GI Bill which covered the expenses at a 2 year college but not enough when he moved on to a 4 year degree. So he now has a student loan financing the rest. My question is, if you are deducting education expenses such as these that are not coming directly from your income, but from financial assistance like the GI Bill and a student loan, do you have to count the GI Bill and Student Loan as income? Are there certain type of education deducations he would not qualify for because of this? Thanks.
Submitted: 6 years ago.
Category: Tax
Expert:  Lev replied 6 years ago.

GI Bill educational benefits are not taxable as long as they are used for qualified educational expenses.

Amounts your husband received from student loans are not taxable income as long as your husband is required to pay them back.

 

Educational expenses paid with the money from the loans are treated as paid by the taxpayer for the purposes of claiming an educational credits. Thus if the money from the student loan were used to pay for tuition or books - these are eligible educational expenses and may be used to claim an educational credit.

However - the money which were used for room and board or other living expenses may not be used to claim a credit.

 

You may find specific requirements for each credit in IRS publication 970 - http://www.irs.gov/pub/irs-pdf/p970.pdf

Let me know if you need any help.

 

 

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