What is the credit?
The Tuition and Textbook Credit is available on your Iowa tax return for qualifying expenses related to your children’s education.
You can claim up to $1,000 of expenses per child, and the credit is 25% of those expenses (so the maximum credit is $250/child).
This credit is only available on your Iowa tax return, not your federal tax return.
What Expenses Qualify?
- Required textbooks. The purchase of yearbooks is NOT a qualifying expense.
- Tuition expenses and other required fees paid to the school.
- Required school supplies (such as the “required supplies” list that almost all schools publish each year). This means things like pencils, erasers, glue, notebooks, etc. qualify for the credit.
- Bus/transportation fees, as long as the fee is paid directly to the school district.
- Driver’s ed fees, as long as the fee is paid directly to the school district (so a fee paid directly to “Teen Safe Driver” or other such third party would NOT qualify).
- Activity ticket fees.
- Entrance fees to dances (even prom!). But things like prom dresses or tuxedos DO NOT qualify.
- Sports or band uniforms. The rule on clothing is: in order to qualify, the clothing must not be suitable for everyday wear.
- Athletic shoes, as long as the shoes CANNOT be worn “on the street.” So football or soccer cleats would qualify, but basketball sneakers wouldn’t, even if the sneakers are only worn while playing basketball because sneakers could be worn as everyday, “on the street” shoes.
- Rental of musical instruments for use in school bands or music lessons, but NOT the purchase of musical instruments.
- The cost of school lunches IS NOT a qualifying expense.
Which Grade Levels Qualify?
- The credit applies to kids in grades K-12. So preschool expenses DO NOT qualify.
I Send My Child to a Private School. Can I Claim the Credit?
- Maybe. You can only claim the credit for expenses relating to an accredited school that does NOT teach religious doctrines. So sending your child to a private Montessori School would probably count, but sending them to a private Catholic school would not.
I Home-School My Child. Does That Count?
- No, expenses related to home-schooling do NOT qualify.
I am Divorced and My Ex and I Trade-off the Dependency Exemptions for the Kids Each Year. Who Claims the Credit?
- The spouse who claims the children on his or her tax return would claim the credit, but only for expenses that he or she actually paid.
You are divorced. You are the custodial parent, so the kids live with you more than half the year. You pay 100% of their school-related expenses, many of which qualify for the Tuition and Textbook Credit. However, it’s your ex’s year to claim
the dependency exemption for the kids.
Even though you paid all the expenses for your kids, you CANNOT claim the credit because you didn’t claim the kids on your tax return. Note that your ex also cannot claim the credit because they didn’t pay any of the expenses themselves.
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“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.”