First and foremost, the taxpayer must be involved in a trade or business or employment situation where the education expense
is required due to the necessary maintenance or enhancement of the individual's skills.
The PATH change is that a computer will qualify as a higher education expense
for 529 Plan purposes.
Because the IRC section 162(a) deduction is related to trade or business expenses, taxpayers claiming an education expense
deduction under this section should carry on a trade or business when the education is undertaken (Jungreis v.
These reimbursements are deductible if the education expense
was incurred for maintaining or improving skills required in employment--but this is a below-line deduction, meaning that the employee must itemize and the deduction is subject to a "2-percent-floor" (i.
Tuition for primary or secondary school education is neither deductible as an education expense
, nor as a charitable contribution.
The taxpayer has many choices, but may not claim more than one benefit for the same education expense
Expenses for room and board incurred by students who are enrolled at least half-time are considered a qualified education expense
Generally, only one tax benefit can be claimed for a particular education expense
Withdrawals from a 529 plan are tax free to the extent they are used to pay the beneficiary's higher education expenses
in the same calendar year.
A Coverdell Education Savings Account, originally called an "Education IRA," may be created for the purpose of paying the qualified education expenses
of a designated beneficiary.