What Is Form 8917: Tuition and Fees Deduction?
Form 8917 is the Internal Revenue Service (IRS) tax form that a taxpayer must fill out to receive a tax deduction called the tuition and fees deduction. The deduction has been extended for qualified tuition and fees paid in calendar years 2018, 2019, and 2020. Taxpayers cannot claim the deduction for expenses paid after 2020 unless it is extended again.
Qualified educational expenses are amounts paid to higher education institutions. Prepaid amounts that are paid in the tax year for academic periods starting in the first three months of the following year also qualify. Amounts paid in a previous or future tax year are not eligible for the deduction in the year of the academic period. So, for example, $2,000 paid in December 2020 for a course that begins in January 2021 qualifies for a 2020 deduction, but not for a 2021 deduction.
Required fees include books, supplies, and equipment if the money is required to be paid to the institution as part of enrollment in a qualified program. It also includes nonacademic fees such as student activity fees or athletic fees—again, as long as these are required to be paid to the institution as part of the condition of enrollment in a qualified program.
- Form 8917 is an Internal Revenue Service (IRS) tax form that accompanies Form 1040 and is used to claim the tuition and fees deduction.
- A taxpayer who filed Form 8863 for educational tax credits is not eligible to claim the same educational expenses for a tax deduction on Form 8917.
- The maximum allowable tuition and fees deduction is $4,000.
Who Can File Form 8917: Tuition and Fees Deduction?
To qualify for the tuition and fees deduction, a taxpayer, their spouse, or a claimed dependent on the tax return must have been enrolled in a qualified educational institution during the tax year in question. In most cases, a taxpayer who qualifies for the tuition and fees deduction will have received a Form 1098-T from the qualified educational institution. There are rare instances when a taxpayer may qualify without having received a 1098-T; they would have to prove eligibility when claiming the deduction. This is the case for nonresident aliens, for example.
Filing a tax return as married filing separately will cause you to be ineligible for the tuition and fees tax deduction.
Who Cannot File Form 8917: Tuition and Fees Deduction?
There are a few classes of individuals who are ineligible for the tuition and fees deduction:
- Taxpayers filing a tax return as married filing separately (MFS) are ineligible for the tax deduction.
- A taxpayer claimed as a dependent on someone else’s return is also ineligible to file for the tax deduction personally. An adult child claimed on their parents’ return, for example, would be ineligible to file Form 8917. But the parents would be able to file Form 8917 on their own tax return.
- A taxpayer whose modified adjusted gross income, or MAGI (as calculated on line 5 of Form 8917) is more than $80,000 as a single filer ($160,000 if filing as married filing jointly, or MFJ) is ineligible for the tax deduction.
- A nonresident alien who did not elect resident alien tax status is ineligible for the tax deduction.
- A taxpayer who filed a Form 8863 for educational tax credits is not eligible to claim the same educational expenses for a tax deduction on Form 8917.
How to File Form 8917: Tuition and Fees Deduction
Line 1 of Form 8917 includes important information such as the first and last name of the student(s), the student’s Social Security number, and adjusted qualified expenses. If there is more than one eligible student, then the amounts for each one are added together and totaled on line 2 (if not, copy the amount from line 1 to line 2). Copy total income from Form 1040 to line 3 on Form 8917. Adjustments to income from Schedule 1 (1040) that are used to calculate MAGI are included on line 4. Subtract line 4 from line 3 and copy to line 5. If the total in line 5 is more than the MAGI cutoffs listed above, then the taxpayer is ineligible for the deduction.
The maximum allowable deduction is $4,000 for a taxpayer whose MAGI is less than $65,000 if single ($130,000 for MFJ). For a taxpayer whose MAGI is between the two amounts (between $65,000 and $80,000 if single, for example), the maximum allowable deduction is $2,000. Line 6 of Form 8917 asks whether the amount on line 5 is more than these lower limits. If yes, enter the lesser of the amount in line 2 or $2,000. If no, enter the lesser of the amount in line 2 or $4,000. The amount in line 6 on Form 8917 flows through to Schedule 1 of Form 1040.
Download Form 8917: Tuition and Fees Deduction
Here is a link to a downloadable Form 8917: Tuition and Fees Deduction for tax year 2020.
Can You Deduct Tuition and Fees from Your Income Taxes?
Yes, but not necessarily the full amount. Internal Revenue Service (IRS) Form 8917 imposes a $4,000 deduction limit for tax year 2020. If the amount you paid is more, then the excess is not deductible and cannot be used in a future tax year.
What Tuition and Fees Deductions or Credits Are Available to Students?
For the 2020 tax year, there are three. The tuition and fees deduction (IRS Form 8917) allows a deduction up to $4,000. The American Opportunity Tax Credit, or AOTC (IRS Form 8863), offers the best deal with a $2,500 dollar-for-dollar, partially refundable credit. And the Lifetime Learning Credit (also IRS Form 8863) offers a nonrefundable credit of up to $2,000.
What’s the Difference Between Refundable and Nonrefundable Tax Credits?
A refundable tax credit is refunded even if your tax liability is less than the credit or even zero. In other words, you get the money from the IRS no matter what. A nonrefundable tax credit is refunded up to the amount of your tax liability. Even if the credit is worth more than the amount of taxes that you owe, you only get up to the amount that you owe.