Back to School Tax Savings with the Iowa Tuition & Textbook Credit

September 6, 2017 § Leave a comment

The calendar change from August to September signals many things – the start of football season, the transition to fall and of course, the beginning of a new school year.  For the kids, going back to school means early bed times, early mornings, and homework.  For the parents, going back to school means shelling out money for school supplies, lunch money accounts, new clothes, fees for books and transportation, and admissions to school events and other extracurricular activities.  As a parent of a sophomore and an 8th grader, I know all too well that sending kids to school can get very expensive in a hurry.

While the demands for money for this or that never seem to stop once the school year starts, it is nice to know that the Iowa Tuition and Textbook Credit is available to provide a little kickback come tax filing time.  Iowa allows a credit for tuition and other school related fees for dependents attending Kindergarten through 12th grade at an accredited Iowa school.  The credit is limited to 25% of each dependent’s first $1,000 of qualifying expenses (maximum of $250 per dependent per year).  At first glance, you may not think it is worth the effort to identify any qualifying expenses, but the list of items included in the credit may surprise you.  The following is a partial list of some expenses that qualify and a few that do not to consider as you send the kids off to school.

SchoolQualifying Expenses

  • Tuition paid to an accredited private school (K-12)
  • Textbook fees and fees for other required instructional materials
  • Rental or purchase of “non-street” costumes for school plays; rental of prom dresses or tuxedos for school related functions and dances; Uniforms for band or school athletic teams – including football or soccer cleats or other footwear not suitable for everyday wear
  • Drivers education classes if paid to the K-12 school
  • Dependent’s fees for admissions to school related activities, athletic events, dances
  • Parking fees paid to the school
  • Rental of musical instrument for school band

Non-qualifying Expenses

  • Expenses for textbooks or other items for home schooling or schooling outside an accredited school
  • School lunches
  • Tutoring not paid to a school
  • Yearbooks
  • Purchase of prom dresses and tuxedos; Purchase of clothes that can be worn outside of the related school function (basketball shoes, t-shirts for extracurricular activities)
  • Drivers education classes paid to a third-party provider (Street Smarts, Drive Tek)
  • Purchase of musical instruments
  • Registration fees, uniforms, shoes and admissions related to non-school sponsored athletic teams, dance or music classes, and events (league sports, private dance or music lessons)

As you can see, it really doesn’t take long for the qualifying expenses to add up in a hurry and can provide for a nice credit on your Iowa return. As always, ask your MHC&S tax professional if you have questions on what may or may not qualify.

A full list of qualifying/non-qualifying items can be found here: Iowa Tuition and Textbook Credit

Brian Newton, CPA
Brian Newton
Partner – McGowen, Hurst, Clark & Smith, P.C.
bnewton@mhcscpa.com

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