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Iowa allows a tax credit of up to $250 for K-12 school-related expenses such as tuition, textbook purchases, and other school-related fees. The credit is 25% of up to $1,000 of expenses per child, so $250 per child is the maximum credit.

Who claims the credit in cases of divorce or any other situation where the parents of a child file separate returns (including married filing separately on a combined return)?

This one has a straightforward answer: ONLY the parent who actually claims the child can claim the credit.

Example

Angie and Alex are married and have a child named Andy. Angie and Alex file separately on a combined return. Angie claims Alex as a dependent on the Iowa return. Only Angie can claim the credit. Unlike most other items on separate Iowa tax returns, this item IS NOT ALLOCATED between the spouses.

Variation

Let’s say Angie and Alex are divorced and it’s “Alex’s year” to claim Andy as a dependent. In this situation, only Alex can claim the credit.

Let’s say Andy lives with Angie (i.e. she’s the custodial parent) and she files and head of household and pays all of his school-related expenses. It doesn’t matter. 

Alex is claiming Andy, so Alex would be the only one entitled to claim the credit.

Since Alex didn’t actually pay any school-related expenses for Andy, Alex’s credit would be $0.

And since Angie isn’t claiming Andy on her tax return, her allowable credit would also be $0, even though she actually paid the expenses herself.

“This blog post, along with comments that may follow, should not be considered tax advice. Before you make final tax or financial decisions, please secure a professional tax advisor to give you advice about your unique situation. To secure Jason as your accountant, please click on the ‘Services’ link at the top of the page.”