Sending a Student to College? Tax Breaks Parents Should Know
Education credits, 529 plans and the dependency rules that decide who claims what — before the first tuition bill lands.
Back-to-school season brings tuition bills, dorm supplies and a few tax opportunities that are easy to fumble. A little planning in August can make a real difference when you file next spring.
Education credits
The American Opportunity Tax Credit and the Lifetime Learning Credit can offset qualified tuition and related expenses. Income limits apply, and you generally can't claim both for the same student in the same year — so choosing the right one matters.
529 plan withdrawals
- Match withdrawals to qualified expenses in the same calendar year.
- Don't double-dip — expenses used for a credit can't also be covered by a tax-free 529 withdrawal.
- Keep tuition statements (Form 1098-T) and receipts for books and required supplies.
Who claims the student?
Generally, the person who claims the student as a dependent claims the education credit. If your student works or receives scholarships, the answer can change — talk with us before either of you files.
