Above-The-Line Education Deduction

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Although this provision expired at the end of 2009, it is likely this provision will be extended to 2010 as it is included in the House Bill (HR4213) that was passed on May 28, 2010 and now awaits Senate approval.  Watch for further developments!

Taxpayers are allowed an above-the-line deduction for qualified tuition and related expenses for the year, to the extent the expenses are in connection with enrollment at an institution of higher education during that tax year, or if those expenses are in connection with an academic term beginning during that tax year or during the first 3 months of the next tax year. 

The deduction is limited both by filing status and AGI. Unlike the other education tax incentives where the deduction is slowly phased out, this deduction is not allowed once the AGI limit is reached. Married individuals who file separately and taxpayers who are claimed as a dependent of another are not allowed to take this deduction. 

Years 2004-2009
Filing Status	AGI Limit	Max Deduction
Joint	130,000	4,000
Joint	160,000	2,000
Others	65,000	4,000
Others	80,000	2,000

Since the expenses that qualify for this deduction are the same as those that qualify for the education credit, taxpayers may qualify for both and will be required to choose between the two. Each taxpayer's individual circumstances must be taken into consideration before making the most beneficial decision. This office can assist you in making an informed choice.

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