Moderate- and low-income households with children in K-12 schools may not realize they are eligible to claim a refundable tax credit for their investment in their child’s learning. The education tax credit and deduction are part of a unique provision of Minnesota’s tax law designed to encourage parents to be active participants in decisions about their children’s learning. Families who file the simple, one-page form when they file their state income tax can return valuable resources to families for basic educational supplies and services. Education tax deduction All families with dependent children in grades K-12 are eligible for the education tax deduction, regardless of income, even if they do not itemize elsewhere on their tax return. For each child in grades K-6, families may take a reduction of up to $1,625 per child; up to $2,500 may be claimed for each child in grades 7-12. Families must be able to provide receipts for such expenses, if the Minnesota Department of Revenue requests them. In addition to educational supplies, music lessons, tutoring and computer hardware and software, private school tuition is an eligible expense for filers using the education tax deduction. Education tax credit Families earning less than $37,500 qualify for the education tax credit whether or not they itemize and whether or not they have paid taxes on income. The credit allows families to claim 75 percent of every dollar spent on eligible goods and services. The amount of credit for families earning between $33,500 and $37,500 is determined on a sliding scale, with families at the ceiling eligible for a credit up to $500 per child. The education tax credit may not be used toward the cost of private school tuition. Eligible items for the tax credit include non-religious textbooks, music and other subjects. Purchase or rental of musical instruments used for class during the school day can be claimed, as can transportation and admissions/fees for school trips, and school transportation expenses for which families pay a non-family member. Some after-school enrichment programs also qualify for the credit and deduction. Instructor fees paid to a qualified instructor for music and dance lessons, academic tutoring, science exploration and study habits coaching – even summer school classes used to fulfill normal school year class requirements – are allowed to the same extent as expenses paid during the normal school day. For more information about the education tax credit and deduction, or to contact organizations working to assist families make the most of their educational expenditures, contact Partnership for Choice in Education (PCE) at 46 East 4th Street, St. Paul, MN 55101, or call (651) 293-9196. Information is also available at Partnership for Choice in Education’s Web site at www.pcemn.org.
