Part III. Summary (Complete only once.)
Publication 970 — Tax Benefits for Education · 2026-10-03 edition · updated 2026-10-04 · United States
16. Taxable amount. Add together all amounts on line 14 for all your Coverdell ESAs. Enter here and include on Schedule 1 (Form 1040), line 8z, listing the type and amount of income . . . . . . . . . 16.
48 Chapter 6 Coverdell Education Savings Account (ESA) Publication 970 (2025)
7. Qualified Tuition Program (QTP)¶
Reminders¶
Rollover to Roth IRA. For certain distributions made after 2023, you can roll over limited amounts from long-term QTPs to Roth IRAs. See Rollovers and Other Transfers .
Introduction¶
QTPs are also called 529 plans. States may establish and maintain programs that allow you to either prepay or contribute to an account for paying a student’s qualified education expenses at an eligible educational institution. Eligible educational institutions may establish and maintain programs that allow you to prepay a student’s qualified education expenses. If you prepay tuition, the student (designated beneficiary) will be entitled to a waiver or a payment of qualified education expenses. You can’t deduct either payments or contributions to a QTP. For information on a specific QTP, you will need to contact the state agency or eligible educational institution that established and maintains it.
What is the tax benefit of a QTP? No tax is due on a distribution from a QTP unless the amount distributed is greater than the beneficiary’s adjusted qualified education expenses (AQEE). See Are Distributions Taxable, later, for more information.
Even if a QTP is used to finance a student’s edu-
TIP cation, the student or the student’s parents may
still be eligible to claim the American opportunity credit or the lifetime learning credit. See Coordination With American Opportunity and Lifetime Learning Credits , later.
What Is a QTP?¶
A QTP is a program set up to allow you to either prepay or contribute to an account established for paying a student’s qualified education expenses at an eligible educational institution. QTPs can be established and maintained by states (or agencies or instrumentalities of a state) and eligible educational institutions. The program must meet certain requirements. Your state government or the eligible educational institution in which you are interested can tell you whether or not they participate in a QTP.
Qualified Education Expenses
Generally, these are expenses required for the enrollment or attendance of the designated beneficiary at an eligible educational institution. For purposes of QTPs, the expenses can be either qualified higher education expenses, qualified elementary and secondary education expenses, or post secondary credential expenses.
Designated beneficiary. The designated beneficiary is generally the student (or future student) for whom the QTP is intended to provide benefits. The designated beneficiary can be changed after participation in the QTP begins. If a state or local government or certain tax-exempt organizations purchase an interest in a QTP as part of a scholarship program, the designated beneficiary is the person who receives the interest as a scholarship.
Eligible Educational Institution
For purposes of a QTP, an eligible educational institution can be either an eligible postsecondary school or an eligible elementary or secondary school.
Eligible postsecondary school. An eligible postsecondary school is generally any accredited public, nonprofit, or proprietary (privately owned profit-making) college, university, vocational school, or other postsecondary educational institution. Also, the institution must be eligible to participate in a student aid program administered by the U.S. Department of Education. Virtually all accredited postsecondary institutions meet this definition. The educational institution should be able to tell you if it’s an eligible educational institution.
An eligible educational institution also includes certain educational institutions located outside the United States that are eligible to participate in a student aid program administered by the U.S. Department of Education.
Eligible elementary or secondary school. An eligible elementary or secondary school is any public, private, or religious school that provides elementary or secondary education (kindergarten through grade 12), as determined under state law.
Qualified Higher Education Expenses
These are expenses related to enrollment or attendance at an eligible postsecondary school. As shown in the following list, to be qualified, some of the expenses must be required by the school and some must be incurred by students who are enrolled at least half-time, defined later.
- The following expenses must be required for enrollment or attendance of a designated beneficiary at an eligible postsecondary school.
a. Tuition and fees.
b. Books, supplies, and equipment.
Publication 970 (2025) Chapter 7 Qualified Tuition Program (QTP) 49
Expenses for special needs services needed by a special needs beneficiary must be incurred in connection with enrollment or attendance at an eligible postsecondary school.
Expenses for room and board must be incurred by students who are enrolled at least half-time (defined later).
The expense for room and board qualifies only to the extent that it isn’t more than the greater of the following two amounts.
a. The allowance for room and board, as determined
by the school, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student.
b. The actual amount charged if the student is resid ing in housing owned or operated by the school.
You may need to contact the eligible educational institution for qualified room and board costs.
The purchase of computer or peripheral equipment, computer software, or Internet access and related services, if it’s to be used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible postsecondary school. (This doesn’t include expenses for computer software for sports, games, or hobbies unless the software is predominantly educational in nature.)
The expenses for fees, books, supplies, and equipment required for the designated beneficiary’s participation in an apprenticeship program registered and certified with the Secretary of Labor under section 1 of the National Apprenticeship Act.
No more than $10,000 paid as principal or interest on qualified student loans of the designated beneficiary or the designated beneficiary’s sibling. A sibling includes a brother, sister, stepbrother, or stepsister. For purposes of the $10,000 limitation, amounts treated as a qualified higher education expense for the loans of a sibling are taken into account for the sibling and not for the designated beneficiary. You can’t deduct as interest on a student loan (see chapter 4) any amount paid from a distribution of earnings from a QTP after 2018 to the extent the earnings are treated as tax free because they were used to pay student loan interest.
Half-time student. A student is enrolled “at least half-time” if the student is enrolled for at least half the full-time academic workload for the course of study the student is pursuing, as determined under the standards of the school where the student is enrolled.
Qualified Elementary and Secondary Education Expenses
These are expenses related to enrollment or attendance at or for students enrolled at or attending an eligible elementary and secondary school.
Tuition.
Curriculum and curricular materials.
Books or other instructional materials.
Online educational materials.
Tuition for tutoring or educational classes outside of the home, including at a tutoring facility, but only if the tutor or instructor is not related to the student, and
a. is licensed as a teacher in any state,
b. has taught at an eligible education institution, or
c. is a subject matter expert in the relevant subject.
Fees for nationally standardized norm-referenced achievement test, an advance placement examination, or any examinations related to college or university admission.
Fees for dual enrollment in an institution of higher education.
Educational therapies for students with disabilities provided by a licensed or accredited practitioner or provider, including occupational, behavioral, physical, and speech-language therapies.
These are expenses for no more than $10,000 of tuition, incurred by a designated beneficiary, in connection with enrollment or attendance at or for students enrolled at or attending an eligible elementary or secondary school.
Qualified Postsecondary Credentialing Expenses
These are expenses related to the enrollment or attendance of a designated beneficiary in a recognized postsecondary credential program.
- The following expenses must be required for enrollment or attendance of a designated beneficiary in a recognized postsecondary credential program, or any other expense incurred in connection with enrollment in or attendance at an eligible education institution (defined under Eligible Educational Institution, earlier).
a. Tuition and fees.
b. Books, supplies, and equipment.
c. Expenses related to enrollment or attendance at
an eligible educational institution.
Fees for testing if the testing is required to obtain or maintain a recognized postsecondary credential.
Fees for continuing education if the education is required to maintain a recognized postsecondary credential.
Recognized postsecondary credential program. A recognized postsecondary credential program is any program to obtain a recognized postsecondary credential if it meets the following:
50 Chapter 7 Qualified Tuition Program (QTP) Publication 970 (2025)
The program is included on a State list prepared under section 122(d) of the Workforce Innovation and Opportunity Act.
The program is listed in the public directory of the Web Enabled Approval Management System (WEAMS) of the Veterans Benefits Administration.
The examination (developed or administered by an organization widely recognized as providing reputable credentials in the occupation) is required to obtain or maintain the credential and the organization recognizes the program as providing training or education which prepares individuals to take the examination; or
The program is identified by the Secretary of Treasury as being a reputable program for obtaining a recognized postsecondary credential.
Recognized postsecondary credential. A recognized postsecondary credential is:
- A postsecondary employment credential that is industry recognized and is
a. Any postsecondary employment credential issued
by a program that is accredited by the Institute for Credentialing Excellence, the National Commission on Certifying Agencies, or the American National Standards Institute,
b. Any postsecondary employment credential that is
included in the Credentialing Opportunities On-Line (COOL) directory of credentialing programs maintained by the Department of Defense or by any branch of the Armed Forces, or
c. Any postsecondary employment credential identi fied by the Secretary of Treasury as being industry recognized.
Any certificate of completion of an apprenticeship that is registered and certified by the Secretary of Labor under the National Apprenticeship Act,
Any occupational or professional license issued or recognized by a State of the Federal Government, and any certification that satisfies a condition for obtaining the license, and
Any recognized postsecondary credential as defined in section 3(52) of the Workforce Innovation and Opportunity Act provided through a program described in paragraph (2)(A).
How Much Can You Contribute?¶
Contributions to a QTP on behalf of any beneficiary can’t be more than the amount necessary to provide for the qualified education expenses of the beneficiary. There are no income restrictions on the individual contributors.
You can contribute to both a QTP and a Coverdell education savings account (ESA) in the same year for the same designated beneficiary.
Recontribution of Refunded Amounts¶
If a student receives a refund of qualified education expenses that were treated as paid by a QTP distribution, the student can recontribute these amounts into any QTP for which they are the beneficiary within 60 days after the date of the refund to avoid the need to figure the taxable part of the QTP distribution.
Are Distributions Taxable?¶
The part of a distribution representing the amount paid or contributed to a QTP doesn’t have to be included in income. This is a return of the investment in the plan.
The recipient of the distribution generally doesn’t have to include in income any earnings distributed from a QTP if the total distribution is less than or equal to AQEE (defined under Figuring the Taxable Portion of a Distribution , be- low). The designated beneficiary is considered the recipient only if the distribution is made (a) directly to the designated beneficiary, or (b) to an eligible educational institution for the benefit of the designated beneficiary. Otherwise, the account owner is considered the recipient of the distribution.
Earnings and return of investment. You will receive a Form 1099-Q from each of the programs from which you received a QTP distribution in 2025. The amount of your gross distribution (box 1) shown on each form will be divided between your earnings (box 2) and your basis, or return of investment (box 3). Form 1099-Q should be sent to you by February 2, 2026 (January 31 falls on a Saturday).
Figuring the Taxable Portion of a Distribution
To determine if total distributions for the year are more or less than the amount of qualified education expenses, you must compare the total of all QTP distributions for the tax year to the AQEE.
Adjusted qualified education expenses (AQEE). This amount is the total qualified education expenses reduced by any tax-free educational assistance. Tax-free educational assistance includes:
The tax-free part of scholarships and fellowship grants (see Tax-Free Scholarships and Fellowship Grants in chapter 1);
Veterans’ educational assistance (see Veterans’ Ben- efits in chapter 1);
Publication 970 (2025) Chapter 7 Qualified Tuition Program (QTP) 51
- The tax-free part of Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chap-
ter 1);
Employer-provided educational assistance (see chapter 10); and
Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance.
Taxable earnings. Use the following steps to figure the taxable part.
Multiply the total distributed earnings shown in box 2 of Form 1099-Q by a fraction. The numerator (top part) is the AQEE paid during the year, and the denominator (bottom part) is the total amount distributed during the year.
Subtract the amount figured in (1) from the total distributed earnings. The result is the amount the beneficiary must include in income. Report it on Schedule 1 (Form 1040), line 8z.
Example 1. In 2016, a young student’s parents opened a savings account for them with a QTP maintained by their state government. Over the years, the parents contributed $18,000 to the account. The total balance in the account was $27,000 on the date the distribution was made. In the summer of 2025, the student enrolled in college and had $8,300 of qualified education expenses for the rest of the year. The college expenses were paid from the following sources.
Gift from parents . . . . . . . . . . . . . . . . . . . . $1,600 Partial tuition scholarship (tax free) . . . . . . . 3,100 QTP distribution . . . . . . . . . . . . . . . . . . . . 5,300
Before the student can determine the taxable part of their QTP distribution, they must reduce their total qualified education expenses by any tax-free educational assistance.
Total qualified education expenses . . . . . . . $8,300 Minus: Tax-free educational assistance . . . - 3,100 Equals: AQEE . . . . . . . . . . . . . . . . . . . . . $5,200
Since the remaining expenses ($5,200) are less than the QTP distribution, part of the earnings will be taxable.
The student’s Form 1099-Q shows that $950 of the QTP distribution is earnings. They figure the taxable part of the distributed earnings as follows.
$5,200 AQEE
- $950 (earnings) ×
$5,300 distribution
= $932 (tax-free earnings)
- $950 (earnings) −$932 (tax-free earnings)
= $18 (taxable earnings)
They must include $18 in income (Schedule 1 (Form 1040), line 8z) as distributed QTP earnings not used for AQEE.
Coordination With American Opportunity and Lifetime Learning Credits
An American opportunity or lifetime learning credit (education credit) can be claimed in the same year the beneficiary takes a tax-free distribution from a QTP, as long as the same expenses aren’t used for both benefits. This means that after the beneficiary reduces qualified education expenses by tax-free educational assistance, the beneficiary must further reduce them by the expenses taken into account in determining the credit.
Example 2. Assume the same facts as in Example 1 , except that the parents claimed an American opportunity credit of $2,500 (based on $4,000 expenses).
Total qualified education expenses . . . . . . . . . $8,300 Minus: Tax-free educational assistance . . . . . . - 3,100 Minus: Expenses taken into account in figuring American opportunity credit . . . . . . . . . . . . . . - 4,000 Equals: AQEE . . . . . . . . . . . . . . . . . . . . . . . . $1,200
The taxable part of the distribution is figured as follows.
$1,200 AQEE
- $950 (earnings) × $5,300 distribution
= $215 (tax-free earnings)
- $950 (earnings) −$215 (tax-free earnings)
= $735 (taxable earnings)
The student must include $735 in income (Schedule 1 (Form 1040), line 8z). This represents distributed earnings not used for AQEE.
Coordination With Coverdell ESA Distributions
If a designated beneficiary receives distributions from both a QTP and a Coverdell ESA in the same year, and the total of these distributions is more than the beneficiary’s AQEE, the expenses must be allocated between the distributions.
Example 3. Assume the same facts as in Example 2, except that instead of receiving a $5,300 distribution from their QTP, the student received $4,600 from that account and $700 from their Coverdell ESA. In this case, the student must allocate their $1,200 of AQEE between the two distributions.
$1,200 $700 ESA distribution $158 × = AQEE $5,300 total distribution AQEE (ESA)
$1,200 $4,600 QTP distribution $1,042 × = AQEE $5,300 total distribution AQEE (QTP)
52 Chapter 7 Qualified Tuition Program (QTP) Publication 970 (2025)
The student then figures the taxable portion of their Coverdell ESA distribution based on qualified education expenses of $158, and the taxable portion of their QTP distribution based on the other $1,042.
Note. If you are required to allocate your expenses between Coverdell ESA and QTP distributions, and you have adjusted qualified elementary and secondary education expenses, see the examples in chapter 6 under Coordina- tion With Qualified Tuition Program (QTP) Distributions .
Losses on QTP Investments
For tax years beginning after 2017 and before 2026, if you have a loss on your investment in a QTP account, you can’t claim the loss on your income tax return. You have a loss only when all amounts from that account have been distributed and the total distributions are less than your unrecovered basis. Your basis is the total amount of contributions to that QTP account.
The aggregation rules that applied if you had dis-
! tributions from more than one QTP account during¶
CAUTION a year were eliminated for distributions after 2014.
For more information, see Notice 2016-13, available at IRS.gov/IRB/2016-07_IRB#NOT-2016-13.
Additional Tax on Taxable Distributions
Generally, if you receive a taxable distribution, you must also pay a 10% additional tax on the amount included in income.
Exceptions. The 10% additional tax doesn’t apply to the following distributions.
Paid to a beneficiary (or to the estate of the designated beneficiary) on or after the death of the designated beneficiary.
Made because the designated beneficiary is disabled. A person is considered to be disabled if proof is provided showing there is a physical or mental impairment that substantially limits any gainful activity. A physician must determine that the person’s condition can be expected to result in death or to be of long-continued and indefinite duration.
Included in income because the designated beneficiary received:
a. A tax-free scholarship or fellowship grant (see
Tax-Free Scholarships and Fellowship Grants in chapter 1);
b. Veterans’ educational assistance (see Veterans’
Benefits in chapter 1);
c. Employer-provided educational assistance (see
chapter 10); or
This exception only applies to the extent the distribution isn’t more than the scholarship, allowance, or payment.
Made on account of the attendance of the designated beneficiary at a U.S. military academy (such as the USNA at Annapolis). This exception applies only to the extent that the amount of the distribution doesn’t exceed the costs of advanced education (as defined in section 2005(d)(3) of title 10 of the U.S. Code) attributable to such attendance.
Included in income only because the qualified education expenses were taken into account in determining the American opportunity or lifetime learning credit (see Coordination With American Opportunity and Lifetime Learning Credits , earlier).
Figuring the additional tax. Use Part II of Form 5329 to figure any additional tax. Report the amount on Schedule 2 (Form 1040), line 8.
Rollovers and Other Transfers¶
Assets can be rolled over or transferred from one QTP to another or from a QTP to an ABLE account. In addition, the designated beneficiary can be changed without transferring accounts. Assets can also be transferred from a QTP to a Roth IRA if certain requirements are met.
Rollovers
Any amount distributed from a QTP isn’t taxable if it’s rolled over to:
Another QTP for the benefit of the same beneficiary or for the benefit of a member of the beneficiary’s family (including the beneficiary’s spouse),
An ABLE account for the benefit of the same beneficiary or for the benefit of a member of the beneficiary’s family (including the beneficiary’s spouse). But this doesn’t apply to the extent the amount distributed when added to other amounts contributed to the ABLE account exceeds the annual contribution limit. For more information about ABLE accounts, see Pub. 907, Tax Highlights for Persons With Disabilities, or
A Roth IRA for the benefit of the same beneficiary, if the distribution is a direct trustee-to-trustee transfer from a QTP account that has been open for more than 15 years and the amount distributed does not exceed total contributions (and attributable earnings) made to the QTP more than 5 years before the distribution date. However, this doesn’t apply to the extent the amount distributed when added to other amounts contributed to Roth IRAs exceeds the annual contribution limit. For more information about contributions to Roth IRAs, see Pub. 590-A.
d. Any other nontaxable (tax-free) payments (other
than gifts or inheritances) received as educational assistance.
Publication 970 (2025) Chapter 7 Qualified Tuition Program (QTP) 53
You should contact the qualified ABLE program
! before contributing any funds to the ABLE ac¶
CAUTION count to ensure that the contribution limit will not
be exceeded.
An amount is rolled over if it’s paid to an ABLE account or another QTP within 60 days after the date of the distribution.
Don’t report qualifying rollovers (those that meet the above criteria) anywhere on Form 1040, 1040-SR, or 1040-NR. These aren’t taxable distributions.
Members of the beneficiary’s family. For these purposes, the beneficiary’s family includes the beneficiary’s spouse and the following other relatives of the beneficiary.
Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them.
Brother, sister, half brother, half sister, stepbrother, or stepsister.
Father or mother or ancestor of either.
Stepfather or stepmother.
Son or daughter of a brother, sister, half brother, or half sister.
Brother or sister of father or mother.
Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.
The spouse of any individual listed above.
First cousin.
Example. When you graduated from college in January last year, you had $5,000 left in your QTP. You wanted to give this money to your younger sibling, who was in junior high school. In order to avoid paying tax on the distribution of the amount remaining in your account, you contributed the same amount to your sibling’s QTP within 60 days of the distribution.
If the rollover is to another QTP for the same ben-
! eficiary, generally, only one rollover is allowed¶
CAUTION within 12 months of a previous transfer to any
QTP for that designated beneficiary. However, taxpayers who receive a Form 1099-Q with respect to a qualifying rollover to or from the Maryland Prepaid College Trust (MPCT) and meet the criteria of Notice 2024-23 are not subject to the 12-month limitation. Notice 2024-23 is avail- able at IRS.gov/irb/2024-07_IRB#NOT-2024-23.
Changing the Designated Beneficiary
There are no income tax consequences if the designated beneficiary of an account is changed to a member of the beneficiary’s family. See Members of the beneficiary’s family, earlier.
Example. Assume the same situation as in the last example. Instead of closing your QTP and paying the distribution into your sibling’s QTP, you could have instructed
the trustee of your account to simply change the name of the beneficiary on the account to that of your sibling.
8. Education Exception to Additional Tax on Early IRA Distributions¶
Introduction¶
Generally, if you take a distribution from your IRA before you reach age 59 1 /2, you must pay a 10% additional tax on the early distribution. This applies to any IRA you own, whether it is a traditional IRA (including a SEP IRA), a Roth IRA, or a SIMPLE IRA. The additional tax on an early distribution from a SIMPLE IRA may be as high as 25%. See Pub. 560, Retirement Plans for Small Business, for information on SEP IRAs, and Pub. 590-B for information about distributions from all other IRAs.
However, you can take distributions from your IRAs for qualified higher education expenses without having to pay the 10% additional tax. You may owe income tax on at least part of the amount distributed, but you may not have to pay the 10% additional tax.
Generally, if the taxable part of the distribution is less than or equal to the adjusted qualified education expenses (AQEE), none of the distribution is subject to the additional tax. If the taxable part of the distribution is more than the AQEE, only the excess is subject to the additional tax.
Who Is Eligible?¶
You can take a distribution from your IRA before you reach age 59 1 /2 and not have to pay the 10% additional tax if, for the year of the distribution, you pay qualified education expenses for:
Yourself;
Your spouse;
Your or your spouse's child, foster child, or adopted child; or
Your or your spouse’s grandchild.
Qualified education expenses. Qualified education expenses, eligible for the exception to the 10% additional tax for early distributions from IRAs, are tuition, fees, books, supplies, and equipment (including computer equipment and related services) required for the enrollment or attendance at an eligible educational institution, including those
54 Chapter 8 Education Exception to Additional Tax on Early
IRA Distributions
Publication 970 (2025)
expenses incurred in connection with a recognized postsecondary credential program.
They also include expenses for special needs services incurred by or for special needs students in connection with their enrollment or attendance at an eligible educational institution.
In addition, if the student is at least a half-time student, room and board are qualified education expenses.
The expense for room and board qualifies only to the extent that it isn't more than the greater of the following two amounts.
The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student.
The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution.
You may need to contact the eligible educational institution for qualified room and board costs.
Additional qualified education expenses in con- nection with elementary and secondary tuition. Qualified higher education expenses include the following expenses in connection with the enrollment or attendance at an elementary or secondary public, private, or religious school:
Tuition.
Curriculum and curricular materials.
Books or other instructional materials.
Online education materials.
Tuition for tutoring or educational classes outside of the home, including at a tutoring facility, but only if the tutor or instructor meets certain requirements. (See Requirements for tutors later.)
Fees for a nationally standardized norm-referenced achievement test, an advanced placement examination, or any examinations related to college or university admission.
Fees for dual enrollment in an institution of higher education.
Educational therapies for students with disabilities provided by a licensed or accredited practitioner or provider, including occupational, behavioral, physical, and speech-language therapies.
Requirements for tutors. Tutors or teachers tutoring or providing educational classes outside of the home must not be related to the student and meet the following requirements.
They must be licensed as a teacher in any state, or
They must have taught at an eligible educational institution, or
They must be a subject matter expert in the relevant subject.
Eligible educational institution. An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. Virtually all accredited public, non-profit, and proprietary (privately owned profit-making) postsecondary institutions meet this definition.
An eligible educational institution also includes certain educational institutions located outside the United States that are eligible to participate in a student aid program administered by the U.S. Department of Education.
TIP
The educational institution should be able to tell you if it is an eligible educational institution.
Half-time student. A student is enrolled “at least half-time” if the student is enrolled for at least half the full-time academic workload for the course of study the student is pursuing as determined under the standards of the school where the student is enrolled.
Figuring the Amount Not Subject to the 10% Additional Tax¶
To determine the amount of your distribution that isn't subject to the 10% additional tax, first figure your AQEE. You do this by reducing your total qualified education expenses by any tax-free educational assistance, which includes:
Expenses used to figure the tax-free portion of distributions from a Coverdell education savings account (ESA) (see Distributions in chapter 6);
The tax-free part of scholarships and fellowship grants (see Tax-Free Scholarships and Fellowship Grants in chapter 1);
The tax-free part of Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chap-
ter 1);
Veterans' educational assistance (see Veterans' Bene- fits in chapter 1);
Employer-provided educational assistance (see chapter 10); and
Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance.
Don't reduce the qualified education expenses by amounts paid with funds the student receives as:
Payment for services, such as wages;
A loan;
A gift;
An inheritance given to either the student or the individual making the withdrawal; or
Publication 970 (2025) Chapter 8 Education Exception to Additional Tax on Early
IRA Distributions
55
- A withdrawal from personal savings (including savings from a qualified tuition program (QTP)).
If your IRA distribution is equal to or less than your AQEE, you aren't subject to the 10% additional tax.
Example 1. In 2025, a teacher (age 32) took a year off from teaching to attend graduate school full time. They paid $5,800 of qualified education expenses from the following sources.
Employer-provided educational assistance
(tax free) . . . . . . . . . . . . . . . . . . . . . . . . . . $5,000 Early distribution from IRA
(taxable part is $500) . . . . . . . . . . . . . . . . . . 3,200
Before the teacher can determine if they must pay the 10% additional tax on their IRA distribution, they must reduce their total qualified education expenses.
Total qualified education expenses . . . . . . . . . $5,800 Minus: Tax-free educational assistance . . . . . . − 5,000 Equals: AQEE $ 800
Because the teacher’s AQEE ($800) is more than the taxable part of their IRA distribution ($500), they don't have to pay the 10% additional tax on any part of this distribution. However, they must include the $500 taxable earnings in their gross income subject to income tax.
Example 2. Assume the same facts as in Example 1, except that the teacher deducted some of the contributions to their IRA, so the taxable part of their early distribution is $1,000. This must be included in their income subject to income tax.
The taxable part of the teacher’s IRA distribution ($1,000) is larger than their $800 AQEE. Therefore, they must pay the 10% additional tax on $200, the taxable part of their distribution ($1,000) that is more than their AQEE ($800). The teacher doesn’t have to pay the 10% additional tax on the remaining $800 of their taxable distribution.
Reporting Early Distributions¶
By February 2, 2026 (January 31 falls on a Saturday), the payer of your IRA distribution should send you Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. The information on this form will help you determine how much of your distribution is taxable for income tax purposes and how much is subject to the 10% additional tax.
If you received an early distribution from your IRA, you must report the taxable part of the distribution on Form 1040, 1040-SR, or 1040-NR, line 4b. Then, if you qualify for an exception for qualified higher education expenses, you must file Form 5329 to show how much, if any, of your early distribution is subject to the 10% additional tax. See
the instructions for Form 5329, Part I, for help in completing the form and entering the results on Schedule 2 (Form 1040), line 8.
There are many other situations in which Form 5329 is required. If, during 2025, you had other distributions from IRAs or qualified retirement plans, or have made excess contributions to certain tax-favored accounts, see the instructions for Schedule 2 (Form 1040), line 8, to determine if you must file Form 5329.
9. Education Savings Bond Program¶
What’s New¶
Modified adjusted gross income (MAGI) limits. For 2025, the amount of your education savings bond interest exclusion is gradually reduced (phased out) if your MAGI is between $99,500 and $114,500 ($149,250 and $179,250 if you file a joint return). You can’t exclude any of the interest if your MAGI is $114,500 or more ($179,250 or more if you file a joint return).
Introduction¶
Generally, you must pay tax on the interest earned on U.S. savings bonds. If you don’t include the interest in income in the years it is earned, you must include it in your income in the year in which you cash in the bonds.
However, when you cash in certain savings bonds under an education savings bond program, you may be able to exclude the interest from income.
Who Can Cash in Bonds Tax Free?¶
You may be able to cash in qualified U.S. savings bonds without having to include in your income some or all of the interest earned on the bonds if you meet all of the following conditions.
You pay qualified education expenses for yourself, your spouse, or a dependent.
Your MAGI is less than $114,500 ($179,250 if married filing jointly).
Your filing status isn’t married filing separately.
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Qualified U.S. savings bonds. A qualified U.S. savings bond is a series EE bond issued after 1989 or a series I bond. The bond must be issued either in your name (as the sole owner) or in the name of both you and your spouse (as co-owners).
The owner must be at least 24 years old before the bond’s issue date. The issue date is printed in the upper-right corner of a paper bond and shown in TreasuryDirect for an electronic bond.
Qualified education expenses. These include the following items you pay for either yourself, your spouse, or a dependent.
Tuition and fees required to enroll at or attend an eligible educational institution. Qualified education expenses don’t include expenses for room and board or for courses involving sports, games, or hobbies that aren’t part of a degree- or certificate-granting program.
Contributions to a qualified tuition program (QTP) (see How Much Can You Contribute? in chapter 7).
Contributions to a Coverdell education savings account (ESA) (see Contributions in chapter 6).
Adjusted qualified education expenses (AQEE). You must reduce your qualified education expenses by all of the following tax-free benefits.
Tax-free part of scholarships and fellowship grants (see Tax-Free Scholarships and Fellowship Grants in chapter 1).
Expenses used to figure the tax-free portion of distributions from a Coverdell ESA (see Qualified Educa- tion Expenses in chapter 6).
Expenses used to figure the tax-free portion of distributions from a QTP (see Qualified Education Expen- ses in chapter 7).
Any tax-free payments (other than gifts or inheritances) received as educational assistance, such as:
a. Veterans’ educational assistance benefits (see
Veterans' Benefits in chapter 1),
b. Qualified tuition reductions (see Qualified Tuition
Reduction in chapter 1), or
c. Employer-provided educational assistance (see
chapter 10).
- Any expenses used in figuring the American opportunity and lifetime learning credits. See What Expenses Qualify? in chapter 2 (American opportunity credit),
and What Expenses Qualify? in chapter 3 (lifetime learning credit), for more information.
Eligible educational institution. An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. Virtually all accredited public, non-profit, and proprietary (privately owned
profit-making) postsecondary institutions meet this definition.
An eligible educational institution also includes certain educational institutions located outside the United States that are eligible to participate in a student aid program administered by the U.S. Department of Education.
TIP
The educational institution should be able to tell you if it is an eligible educational institution.
Dependent. A person who qualifies as your dependent will be listed by name in the Dependents section of your Form 1040 or 1040-SR. See the Instructions for Form 1040.
Modified adjusted gross income (MAGI). For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return without taking into account this interest exclusion. However, as discussed below, there may be other modifications.
Your MAGI is the AGI on line 11a of Form 1040 or 1040-SR figured without taking into account any savings bond interest exclusion and modified by adding back any:
Foreign earned income exclusion,
Foreign housing exclusion,
Foreign housing deduction,
Exclusion of income by bona fide residents of American Samoa,
Exclusion of income by bona fide residents of Puerto Rico,
Exclusion for adoption benefits received under an employer’s adoption assistance program, and
Deduction for student loan interest.
Use the worksheet in the instructions for line 9 of Form 8815 to figure your MAGI. If you claim any of the exclusion or deduction items (1)–(6) listed above, add the amount of the exclusion or deduction to the amount on line 5 of the worksheet. Don’t add in the deduction for (7) student loan interest, because line 4 of the worksheet already includes this amount. Enter the total on Form 8815, line 9, as your MAGI.
Because the deduction for interest expenses at-
! tributable to royalties and other investments is¶
CAUTION limited to your net investment income, you can’t
figure the deduction until you have figured this interest ex- clusion. Therefore, if you had interest expenses attributa- ble to royalties and deductible on Schedule E (Form 1040), Supplemental Income and Loss, you must make a special computation of your deductible interest without re- gard to this exclusion to figure the net royalty income inclu- ded in your MAGI. See Form 8815 and its instructions for more information.
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Figuring the Tax-Free Amount¶
If the total you receive when you cash in the bonds isn’t more than the AQEE for the year, all of the interest on the bonds may be tax free. However, if the total you receive when you cash in the bonds is more than the adjusted expenses, only part of the interest may be tax free.
To determine the tax-free amount, multiply the interest part of the proceeds by a fraction. The numerator (top part) of the fraction is the AQEE you paid during the year. The denominator (bottom part) of the fraction is the total proceeds you received during the year.
Example. In February 2025, a married couple cashed a qualified series EE U.S. savings bond. They received proceeds of $9,000, representing principal of $6,000 and interest of $3,000. In 2025, they paid $7,650 of their child’s college tuition. They aren’t claiming an American opportunity or lifetime learning credit for those expenses, and their child doesn’t have any tax-free educational assistance. Their MAGI for 2025 was $90,000.
$3,000 × interest
$7,650 AQEE
$2,550
$9,000 proceeds tax-free interest
They can exclude $2,550 of interest in 2025. They must pay tax on the remaining $450 ($3,000 − $2,550) of interest.
Effect of the Amount of Your Income on the Amount of Your Exclusion
The amount of your interest exclusion is gradually reduced (phased out) if your MAGI is between $99,500 and $114,500 (between $149,250 and $179,250 if your filing status is married filing jointly). You can’t exclude any of the interest if your MAGI is equal to or more than the upper limit.
The phaseout, if any, is figured for you when you fill out Form 8815.
Claiming the Exclusion¶
Use Form 8815 to figure your education savings bond interest exclusion. Enter your exclusion on line 3 of Schedule B (Form 1040), Interest and Ordinary Dividends. Attach Form 8815 to your tax return.
10. Employer-Provided Educational Assistance¶
Reminder¶
Educational assistance benefits. Employer-provided educational assistance benefits include payments made after March 27, 2020 for principal or interest on any qualified education loan you incurred for your education. See Educational assistance benefits .
Introduction¶
If you receive educational assistance benefits from your employer under an educational assistance program, you can exclude up to $5,250 of those benefits each year. This means your employer shouldn’t include those benefits with your wages, tips, and other compensation shown in box 1 of your Form W-2. This also means that you don’t have to include the benefits on your income tax return.
You can’t use any of the tax-free education expen-
! ses paid for by your employer as the basis for any¶
CAUTION other deduction or credit, including the American
opportunity credit and lifetime learning credit.
Educational assistance program. To qualify as an educational assistance program, the plan must be written and must meet certain other requirements. Your employer can tell you whether there is a qualified program where you work.
Educational assistance benefits. Tax-free educational assistance benefits include payments for tuition, fees and similar expenses, books, supplies, and equipment. Education generally includes any form of instruction or training that improves or develops your capabilities. The payments don't have to be for work-related courses or courses that are part of a degree program.
Tax-free educational assistance benefits also include payments made after March 27, 2020, whether paid to the employee or to a lender, of principal or interest on any qualified education loan (defined later) incurred by the employee for education of the employee.
Educational assistance benefits don't include payments for the following items.
Meals, lodging, or transportation.
Tools or supplies (other than textbooks) that you can keep after completing the course of instruction.
Courses involving sports, games, or hobbies unless they:
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a. Have a reasonable relationship to the business of
your employer, or
b. Are required as part of a degree program.
Qualified education loan. A qualified education loan is generally the same as a qualified student loan. See Quali- fied Student Loan in chapter 4. However, as discussed earlier, the loan must be incurred by the employee for edu- cation of the employee.
Benefits over $5,250. If your employer pays more than $5,250 in educational assistance benefits for you during the year, you must generally pay tax on the amount over $5,250. Your employer should include in your wages (box 1 of Form W-2) the amount that you must include in income.
Working condition fringe benefit. If the benefits over $5,250 also qualify as a working condition fringe benefit, your employer doesn't have to include them in your wages. A working condition fringe benefit is a benefit that, had you paid for it, would be allowable as a business expense deduction. For more information on working condition fringe benefits, see Working Condition Benefits in chapter 2 of Pub. 15-B, Employer's Tax Guide to Fringe Benefits.
What’s New¶
Standard mileage rate. Generally, if you claim a business deduction for work-related education and you drive your car to and from school, the amount you can deduct for miles driven from January 1, 2025, through December 31, 2025, is 70 cents a mile. For more information, see
Transportation Expenses under What Expenses Can Be Deducted .
Reminder¶
Miscellaneous itemized deductions. For tax years beginning after 2017, you no longer deduct work-related education expenses as a miscellaneous itemized deduction subject to a 2%-of-adjusted-gross-income floor.
Introduction¶
This chapter discusses work-related education expenses you may be able to deduct as business expenses.
To claim such a deduction, you must:
File Schedule C (Form 1040), Profit or Loss From Business, or Schedule F (Form 1040), Profit or Loss From Farming, if you are self-employed;
File Form 2106, Employee Business Expenses, if you are an Armed Forces reservist, a qualified performing artist, a fee-based state or local government official, or an individual with a disability claiming impairment-related education expenses;
Itemize your deductions on Schedule A (Form 1040) or Schedule A (Form 1040-NR), if you are an individual with a disability claiming impairment-related education expenses; and
Have expenses for education that meet the requirements discussed under Qualifying Work-Related Edu- cation , later.
What is the tax benefit of taking a business deduc- tion for work-related education? If you are self-employed, you deduct your expenses for qualifying work-related education directly from your self-employment income. This reduces the amount of your income subject to both income tax and self-employment tax.
If you are an Armed Forces reservist, qualified performing artist, or a fee-based state or local government official, you deduct your expenses for qualifying work-related education directly from your income as you figure your adjusted gross income.
If you are an individual with a disability and can itemize your deductions, you deduct your impairment-related education expenses as an itemized deduction. An itemized deduction reduces the amount of your income subject to tax.
Your work-related education expenses may also qualify you for other tax benefits, such as the American opportunity (see chapter 2) and lifetime learning (see chapter 3) credits. You may qualify for these other benefits even if you don’t meet the requirements listed above.
Also, your work-related education expenses may qualify you to claim more than one tax benefit. Generally, you may claim any number of benefits as long as you use different expenses to figure each one.
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!¶
CAUTION
You haven’t necessarily met the minimum educa- tional requirements of your trade or business sim- ply because you are already doing the work.
Example 1. You are a full-time engineering student. Although you haven’t received your degree or certification, you work part time as an engineer for a firm that will employ you as a full-time engineer after you finish college. Although your college engineering courses improve your skills in your present job, they are also needed to meet the minimum job requirements for a full-time engineer. The education isn’t qualifying work-related education.
Example 2. You are an accountant and you have met the minimum educational requirements of your employer. Your employer later changes the minimum educational requirements and requires you to take college courses to keep your job. These additional courses can be qualifying work-related education because you have already satisfied the minimum requirements that were in effect when you were hired.
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Education that qualified teachers can’t be found, the school can hire persons with only 3 years of college. However, to keep their jobs, these teachers must get a bachelor’s degree and the required professional education courses within 3 years.
Under these facts, the bachelor’s degree, whether or not it includes the 10 professional education courses, is considered the minimum educational requirement for qualification as a teacher in your state.
If you have all the required education except the fifth year, you have met the minimum educational requirements. The fifth year of training is qualifying work-related education unless it is part of a program of study that will qualify you for a new trade or business.
Example 2. Assume the same facts as in Example 1 , except that you have a bachelor’s degree and only six professional education courses. The additional four education courses can be qualifying work-related education. Although you don’t have all the required courses, you have already met the minimum educational requirements.
Example 3. Assume the same facts as in Example 1 , except that you are hired with only 3 years of college. The courses you take that lead to a bachelor’s degree (including those in education) aren’t qualifying work-related education. They are needed to meet the minimum educational requirements for employment as a teacher.
Example 4. You have a bachelor’s degree and you work as a temporary instructor at a university. At the same time, you take graduate courses toward an advanced degree. The rules of the university state that you can become a faculty member only if you get a graduate degree. Also, you can keep your job as an instructor only as long as you show satisfactory progress toward getting this degree. You haven’t met the minimum educational requirements to qualify you as a faculty member. The graduate courses aren’t qualifying work-related education.
Certification in a new state. Once you have met the minimum educational requirements for teachers for your state, you are considered to have met the minimum educational requirements in all states. This is true even if you must get additional education to be certified in another state. Any additional education you need is qualifying work-related education. You have already met the minimum requirements for teaching. Teaching in another state isn’t a new trade or business.
Example. You hold a permanent teaching certificate in State A and are employed as a teacher in that state for several years. You move to State B and are promptly hired as a teacher. You are required, however, to complete certain prescribed courses to get a permanent teaching certificate in State B. These additional courses are qualifying work-related education because the teaching position in State B involves the same general kind of work for which you were qualified in State A.
Education That Qualifies You for a New Trade or Business
Education that is part of a program of study that will qualify you for a new trade or business isn’t qualifying work-related education. This is true even if you don’t plan to enter that trade or business.
If you are an employee, a change of duties that involves the same general kind of work isn’t a new trade or business.
Example 1. You are an accountant. Your employer requires you to get a law degree at your own expense. You register at a law school for the regular curriculum that leads to a law degree. Even if you don’t intend to become a lawyer, the education isn’t qualifying because the law degree will qualify you for a new trade or business.
Example 2. You are a general practitioner of medicine. You take a 2-week course to review developments in several specialized fields of medicine. The course doesn’t qualify you for a new profession. It is qualifying work-related education because it maintains or improves skills required in your present profession.
Example 3. While working in the private practice of psychiatry, you enter a program to study and train at an accredited psychoanalytic institute. The program will lead to qualifying you to practice psychoanalysis. The psychoanalytic training doesn’t qualify you for a new profession. It is qualifying work-related education because it maintains or improves skills required in your present profession.
Bar or CPA Review Course
Review courses to prepare for the bar examination or the certified public accountant (CPA) examination aren’t qualifying work-related education. They are part of a program of study that can qualify you for a new profession.
Teaching and Related Duties
All teaching and related duties are considered the same general kind of work. A change in duties in any of the following ways isn’t considered a change to a new business.
Elementary school teacher to secondary school teacher.
Teacher of one subject, such as biology, to teacher of another subject, such as art.
Classroom teacher to guidance counselor.
Classroom teacher to school administrator.
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What Expenses Can Be Deducted?¶
If your education meets the requirements described earlier under Qualifying Work-Related Education, you may be able to deduct your education expenses as business expenses. If you aren’t self-employed, you can deduct business expenses only if you are an Armed Forces reservist, qualified performing artist, fee-based state or local government official, or, for impairment-related expenses, an individual with a disability.
You can’t deduct expenses related to tax-exempt and excluded income.
Deductible expenses. The following education expenses can be deducted.
Tuition, books, supplies, lab fees, and similar items.
Certain transportation and travel costs.
Other education expenses, such as costs of research and typing when writing a paper as part of an educational program.
Nondeductible expenses. You can’t deduct personal or capital expenses. For example, you can’t deduct the dollar value of vacation time or annual leave you take to attend classes. This amount is a personal expense.
Unclaimed reimbursement. If you don’t claim reimbursement that you are entitled to receive from your employer, you can’t deduct the expenses that apply to that unclaimed reimbursement.
Example. Your employer agrees to pay your education expenses if you file a voucher showing your expenses. You don’t file a voucher and you don’t get reimbursed. Because you didn’t file a voucher, you can’t deduct the expenses on your tax return.
Transportation Expenses
If your education qualifies, you can deduct local transportation costs of going directly from work to school. If you are regularly employed and go to school on a temporary basis, you can also deduct the costs of returning from school to home.
Temporary basis. You go to school on a temporary basis if either of the following situations applies to you.
Your attendance at school is realistically expected to last 1 year or less and does indeed last for 1 year or less.
Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. Your attendance is temporary up to the date you determine it will last more than 1 year.
If you are in either situation (1) or (2), your attendance isn’t temporary if facts and circumstances indicate otherwise.
Attendance not on a temporary basis. You don’t go to school on a temporary basis if either of the following situations applies to you.
Your attendance at school is realistically expected to last more than 1 year. It doesn’t matter how long you actually attend.
Initially, your attendance at school is realistically expected to last 1 year or less, but at a later date your attendance is reasonably expected to last more than 1 year. Your attendance isn’t temporary after the date you determine it will last more than 1 year.
Deductible Transportation Expenses
If you are regularly employed and go directly from home to school on a temporary basis, you can deduct the roundtrip costs of transportation between your home and school. This is true regardless of the location of the school, the distance traveled, or whether you attend school on nonwork days.
Transportation expenses include the actual costs of bus, subway, cab, or other fares, as well as the costs of using your car. Transportation expenses don’t include amounts spent for travel, meals, or lodging while you are away from home overnight.
Example 1. You regularly work in a nearby town, and go directly from work to home. You also attend school every work night for 3 months to take a course that improves your job skills. Since you are attending school on a temporary basis, you can deduct your daily roundtrip transportation expenses in going between home and school. This is true regardless of the distance traveled.
Example 2. Assume the same facts as in Example 1 , except that on certain nights you go directly from work to school and then home. You can deduct your transportation expenses from your regular work site to school and then home.
Example 3. Assume the same facts as in Example 1 , except that you attend the school for 9 months on Saturdays, nonwork days. Since you are attending school on a temporary basis, you can deduct your roundtrip transportation expenses in going between home and school.
Example 4. Assume the same facts as in Example 1, except that you attend classes twice a week for 15 months. Since your attendance in school isn’t considered temporary, you can’t deduct your transportation expenses in going between home and school. If you go directly from work to school, you can deduct the one-way transportation expenses of going from work to school. If you go from work to home to school and return home, your transportation expenses can’t be more than if you had gone directly from work to school.
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Using your car. If you use your car (whether you own or lease it) for transportation to school, you can deduct your actual expenses or use the standard mileage rate to figure the amount you can deduct. The standard mileage rate for miles driven from January 1, 2025, through December 31, 2025, is 70 cents a mile. Whichever method you use, you can also deduct parking fees and tolls. See Pub. 463, chapter 4, for information on deducting your actual expenses of using a car.
Travel Expenses
You can deduct expenses for travel, meals (see 50% limit on meals , later), and lodging if you travel overnight mainly to obtain qualifying work-related education.
Travel expenses for qualifying work-related education are treated the same as travel expenses for other employee business purposes. For more information, see chapter 1 of Pub. 463.
later) and lodging costs for the time you attended the university.
Example 3. You work in Nashville and recently traveled to California to take a 2-week seminar. The seminar is qualifying work-related education.
While there, you spent an extra 8 weeks on personal activities. The facts, including the extra 8-week stay, show that your main purpose was to take a vacation.
You can’t deduct your roundtrip airfare or your meals and lodging for the 8 weeks. You can deduct only your expenses for meals (see 50% limit on meals , later) and lodg- ing for the 2 weeks you attended the seminar.
Cruises and conventions. Certain cruises and conventions offer seminars or courses as part of their itinerary. Even if the seminars or courses are work related, your deduction for travel may be limited. This applies to:
Travel by ocean liner, cruise ship, or other form of luxury water transportation; and
Conventions outside the North American area.
For a discussion of the limits on travel expense deductions that apply to cruises and conventions, see Luxury Water Travel and Conventions in chapter 1 of Pub. 463.
50% limit on meals. You can deduct only 50% of the cost of your meals while traveling away from home to obtain qualifying work-related education. If you were reimbursed for the meals, see How To Treat Reimbursements , later.
Qualified performing artists and fee-based state or local government officials must use Form 2106 to apply the 50% limit.
Travel as Education
You can’t deduct the cost of travel as a form of education even if it is directly related to your duties in your work or business.
Example. You are a French language teacher. While on sabbatical leave granted for travel, you traveled through France to improve your knowledge of the French language. You chose your itinerary and most of your activities to improve your French language skills. You can’t deduct your travel expenses as education expenses. This is true even if you spent most of your time learning French by visiting French schools and families, attending movies or plays, and engaging in similar activities.
No Double Benefit Allowed
You can’t do the following.
Deduct work-related education expenses as business expenses if you benefit from these expenses under any other provision of the law.
Deduct work-related education expenses paid with tax-free scholarship, grant, or employer-provided educational assistance.
!¶
CAUTION
You can’t deduct expenses for personal activities such as sightseeing, visiting, or entertaining.
Mainly personal travel. If your travel away from home is mainly personal, you can’t deduct all of your expenses for travel, meals, and lodging. You can deduct only your expenses for lodging and meals (see 50% limit on meals, later) during the time you attend the qualified educational activities.
Whether a trip’s purpose is mainly personal or educational depends upon the facts and circumstances. An important factor is the comparison of time spent on personal activities with time spent on educational activities. If you spend more time on personal activities, the trip is considered mainly educational only if you can show a substantial nonpersonal reason for traveling to a particular location.
Example 1. You work in Newark, New Jersey. You traveled to Chicago to take a deductible 1-week course at the request of your employer. Your main reason for going to Chicago was to take the course.
While there, you took a sightseeing trip, entertained some friends, and took a side trip to Pleasantville for a day.
Since the trip was mainly for business, you can deduct your roundtrip airfare to Chicago. You can’t deduct your transportation expenses of going to Pleasantville. You can deduct only the meals (see 50% limit on meals, later) and lodging connected with your educational activities.
Example 2. You work in Boston. You went to a university in Michigan to take a course for work. The course is qualifying work-related education.
You took one course, which is one-fourth of a full course load of study. You spent the rest of the time on personal activities. Your reasons for taking the course in Michigan were all personal.
Your trip is mainly personal because three-fourths of your time is considered personal time. You can’t deduct the cost of your roundtrip train ticket to Michigan. You can deduct one-fourth of the meals (see 50% limit on meals,
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Adjustments to Qualifying Work-Related Education Expenses
If you pay qualifying work-related education expenses with certain tax-free funds, you can’t claim a deduction for those amounts. You must reduce the qualifying expenses by the amount of such expenses allocable to the tax-free educational assistance.
Tax-free educational assistance. This includes:
The tax-free part of scholarships and fellowship grants (see Tax-Free Scholarships and Fellowship Grants in chapter 1);
The tax-free part of Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chap-
ter 1);
Employer-provided educational assistance (see chapter 10);
Veterans’ educational assistance (see Veterans' Ben- efits in chapter 1); and
Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance.
Amounts that don’t reduce qualifying work-related education expenses. Don’t reduce the qualifying work-related education expenses by amounts paid with funds the student receives as:
Payment for services, such as wages;
A loan;
A gift;
An inheritance; or
A withdrawal from the student’s personal savings.
Also, don’t reduce the qualifying work-related education expenses by any scholarship or fellowship grant reported as income on the student’s return or any scholarship that, by its terms, can’t be applied to qualifying work-related education expenses.
How To Treat Reimbursements¶
How you treat reimbursements depends on the arrangement you have with your employer.
There are two basic types of reimbursement arrangements—accountable plans and nonaccountable plans. You can tell the type of plan you are reimbursed under by the way the reimbursement is reported on your Form W-2.
Note. The following rules about reimbursement arrangements also apply to expense allowances received from your employer.
Accountable Plans
To be an accountable plan, your employer’s reimbursement arrangement must require you to meet all three of the following rules.
Your expenses must have a business connection. This means your expenses must be allowed under the rules for qualifying work-related education explained earlier.
You must adequately account to your employer for your expenses within a reasonable period of time.
You must return any reimbursement or allowance in excess of the expenses accounted for within a reasonable period of time.
If you are reimbursed under an accountable plan, your employer shouldn’t include any reimbursement of income on your Form W-2, box 1.
If your employer included reimbursements on your
TIP Form W-2, box 1, and you meet all three rules for
accountable plans, ask your employer for a cor- rected Form W-2.
Accountable plan rules not met. Even though you are reimbursed under an accountable plan, some of your expenses may not meet all three rules for accountable plans. Those expenses that fail to meet the three rules are treated as having been reimbursed under a Nonaccountable Plan (discussed later).
Expenses equal reimbursement. Under an accountable plan, if your expenses equal your reimbursement, you don’t complete Form 2106. Because your expenses and reimbursements are equal, you don’t have unreimbursed work-related education expenses.
Excess expenses. If your expenses are more than your reimbursement, you generally cannot deduct your excess expenses. See Deducting Business Expenses, later.
Allocating your reimbursements for meals. Because your excess meal expenses are subject to the 50% limit, you must figure them separately from your other expenses. If your employer paid you a single amount to cover both meals and other expenses, you must allocate the reimbursement so that you can figure your excess meal expenses separately. Make the allocation as follows.
Divide your meal expenses by your total expenses.
Multiply your total reimbursement by the result from (1). This is the allocated reimbursement for your meal expenses.
Subtract the amount figured in (2) from your total reimbursement. The difference is the allocated reimbursement for your other expenses of qualifying work-related education.
Example. You are a qualified performing artist and one of your employers paid you an expense allowance of $2,000 under an accountable plan. The allowance was to cover all of your expenses of traveling away from home to
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take a 2-week training course for work. There was no indication of how much of the reimbursement was for each type of expense. Your actual expenses equal $2,500 ($425 for meals + $700 lodging + $150 transportation expenses + $1,225 for books and tuition).
Using the steps listed above, allocate the reimbursement between the $425 meal expenses and the $2,075 other expenses.
- $425 meal expenses
$2,500 total = 0.17
expenses
- $2,000 (reimbursement) × 0.17
= $340 (allocated reimbursement for meal expenses)
- $2,000 (reimbursement) −$340 (meals)
= $1,660 (allocated reimbursement for other qualifying
work-related education expenses)
Your excess meal expenses are $85 ($425 − $340) and your excess other expenses are $415 ($2,075 − $1,660). After you apply the 50% limit to your meals, you can deduct your excess work-related education expenses of $458 (($85 × 50%) + $415). See Deducting Business Ex- penses , later.
Nonaccountable Plans
Your employer will combine the amount of any reimbursement or other expense allowance paid to you under a nonaccountable plan with your wages, salary, or other pay and report the total on your Form W-2, box 1.
You generally cannot deduct your expenses regardless of whether they are more than, less than, or equal to your reimbursement. See Deducting Business Expenses , later.
Reimbursements for nondeductible expenses. Reimbursements you received for nondeductible expenses are treated as paid under a nonaccountable plan. You must include them in your income. For example, you must include in your income reimbursements your employer gave you for expenses of education that:
You need to meet the minimum educational requirements for your job, or
Is part of a program of study that can qualify you for a new trade or business.
For more information on accountable and nonaccountable plans, see chapter 6 of Pub. 463.
Deducting Business Expenses¶
Self-employed persons and employees report their business expenses differently.
The following information explains what forms you must use to deduct the cost of your qualifying work-related education as a business expense.
Self-Employed Persons
If you are self-employed, you must report the cost of your qualifying work-related education on the appropriate form used to report your business income and expenses (generally, Schedule C (Form 1040), or Schedule F (Form 1040)). If your education expenses include expenses for a car or truck, travel, or meals, report those expenses the same way you report other business expenses for those items. See the instructions for the form you file for information on how to complete it.
Armed Forces Reservists, Performing Artists, and Fee-Basis Officials
If you are an Armed Forces reservist, a qualified performing artist, or a state (or local) government official who is paid in whole or in part on a fee basis, you can deduct the cost of your qualifying work-related education as an adjustment to gross income.
Include the cost of your qualifying work-related education with any other employee business expenses on Schedule 1 (Form 1040), line 12. You must complete Form 2106 to figure your deduction.
For more information on qualified performing artists, see chapter 6 of Pub. 463.
Impairment-Related Work Expenses
If you are an individual with a disability and have impairment-related work expenses that are necessary for you to be able to get qualifying work-related education, you can deduct these expenses on Schedule A (Form 1040), line 16, or Schedule A (Form 1040-NR), line 7. To deduct these expenses, you must complete Form 2106.
For more information on impairment-related work expenses, see chapter 6 of Pub. 463.
Recordkeeping¶
You must keep records as proof of any deduction claimed on your tax return. Generally, you should
If you are an employee who is reimbursed for expenses and you give your records and documentation to your employer, you don’t have to keep duplicate copies of this information. However, you should keep your records for a 3-year period if:
You claim deductions for expenses that are more than your reimbursement,
Your employer doesn’t use adequate accounting procedures to verify expense accounts,
You are related to your employer, or
Your expenses are reimbursed under a nonaccountable plan.
66 Chapter 11 Business Deduction for Work-Related
Education
Publication 970 (2025)
Examples of records to keep. If any of the above cases apply to you, you must be able to prove that your expenses are deductible. You should keep adequate records or have sufficient evidence that will support your expenses. Estimates or approximations don’t qualify as proof of an expense. Some examples of what can be used to help prove your expenses are the following.
Documents, such as transcripts, course descriptions, catalogs, etc., showing periods of enrollment in educational institutions, principal subjects studied, and descriptions of educational activity.
Canceled checks and receipts to verify amounts you spent for:
a. Tuition and books,
b. Meals and lodging while away from home over night for educational purposes,
c. Travel and transportation, and
d. Other education expenses.
Statements from your employer explaining whether the education was necessary for you to keep your job, salary, or status; how the education helped maintain or improve skills needed in your job; how much reimbursement you received; and, if you are a teacher, the type of certificate and subjects taught.
Complete information about any scholarship or fellowship grants, including amounts you received during the year.
12. How To Get Tax Help¶
If you have questions about a tax issue; need help preparing your tax return; or want to download free publications, forms, or instructions, go to IRS.gov to find resources that can help you right away.
Tax reform. Tax reform legislation impacting federal taxes, credits, and deductions was enacted in P.L. 119-21, commonly known as the One Big Beautiful Bill Act, on July 4, 2025. Go to IRS.gov/OBBB for more information and updates on how this legislation affects your taxes.
Preparing and filing your tax return. After receiving all your wage and earnings statements (Forms W-2, W-2G, 1099-R, 1099-MISC, 1099-NEC, etc.); unemployment compensation statements (by mail or in a digital format) or other government payment statements (Form 1099-G); and interest, dividend, and retirement statements from banks and investment firms (Forms 1099), you have several options to choose from to prepare and file your tax re
turn. You can prepare the tax return yourself, see if you qualify for free tax preparation, or hire a tax professional to prepare your return.
Free options for tax preparation. Your options for preparing and filing your return online or in your local community, if you qualify, include the following.
Free File. This program lets you prepare and file your federal individual income tax return for free using software or Free File Fillable Forms. However, state tax preparation may not be available through Free File. Go to IRS.gov/FreeFile to see if you qualify for free online federal tax preparation, e-filing, and direct deposit or payment options.
VITA. The Volunteer Income Tax Assistance (VITA) program offers free tax help to people with low-to-moderate incomes, persons with disabilities, and limited-English-speaking taxpayers who need help preparing their own tax returns. Go to IRS.gov/ VITA, download the free IRS2Go app, or call
800-906-9887 for information on free tax return prepa- ration.
TCE. The Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers, particularly those who are 60 years of age and older. TCE volunteers specialize in answering questions about pensions and retirement-related issues unique to seniors. Go to IRS.gov/TCE or download the free IRS2Go app for information on free tax return preparation.
MilTax. Members of the U.S. Armed Forces and qualified veterans may use MilTax, a free tax service offered by the Department of Defense through Military OneSource. For more information, go to MilitaryOneSource ( MilitaryOneSource.mil/MilTax ).
Also, the IRS offers Free Fillable Forms, which can be completed online and then e-filed regardless of income.
Using online tools to help prepare your return. Go to IRS.gov/Tools for the following.
- The Earned Income Tax Credit Assistant ( IRS.gov/ EITCAssistant ) determines if you’re eligible for the
earned income credit (EITC).
The Online EIN Application ( IRS.gov/EIN ) helps you get an employer identification number (EIN) at no cost.
The Tax Withholding Estimator ( IRS.gov/W4App ) makes it easier for you to estimate the federal income tax you want your employer to withhold from your paycheck. This is tax withholding. See how your withholding affects your refund, take-home pay, or tax due.
The Sales Tax Deduction Calculator ( IRS.gov/ SalesTax ) figures the amount you can claim if you
itemize deductions on Schedule A (Form 1040).
Getting answers to your tax questions. On IRS.gov, you can get up-to-date information on current events and changes in tax law.
Publication 970 (2025) Chapter 12 How To Get Tax Help 67
- IRS.gov/Help : A variety of tools to help you get an-
swers to some of the most common tax questions.
- IRS.gov/ITA : The Interactive Tax Assistant, a tool that
will ask you questions and, based on your input, pro- vide answers on a number of tax topics.
IRS.gov/Forms : Find forms, instructions, and publications. You will find details on the most recent tax changes and interactive links to help you find answers to your questions.
You may also be able to access tax information in your e-filing software.
Need someone to prepare your tax return? There are various types of tax return preparers, including enrolled agents, certified public accountants (CPAs), accountants, and many others who don’t have professional credentials. If you choose to have someone prepare your tax return, choose that preparer wisely. A paid tax preparer is:
Primarily responsible for the overall substantive accuracy of your return,
Required to sign the return, and
Required to include their preparer tax identification number (PTIN).
Although the tax preparer always signs the return,
! you’re ultimately responsible for providing all the¶
CAUTION information required for the preparer to accurately
prepare your return and for the accuracy of every item re- ported on the return. Anyone paid to prepare tax returns for others should have a thorough understanding of tax matters. For more information on how to choose a tax pre- parer, go to Tips for Choosing a Tax Preparer on IRS.gov.
Employers can register to use Business Services On- line. The Social Security Administration (SSA) offers online service at SSA.gov/employer for fast, free, and secure W-2 filing options to CPAs, accountants, enrolled agents, and individuals who process Form W-2, Wage and Tax Statement; and Form W-2c, Corrected Wage and Tax Statement.
Business tax account. If you are a sole proprietor, a partnership, an S corporation, a C corporation, or a single-member limited liability company (LLC), you can view your tax information on record with the IRS and do more with a business tax account. Go to IRS.gov/ BusinessAccount for more information.
IRS social media. Go to IRS.gov/SocialMedia to see the various social media tools the IRS uses to share the latest information on tax changes, scam alerts, initiatives, products, and services. At the IRS, privacy and security are our highest priority. We use these tools to share public information with you. Don’t post your social security number (SSN) or other confidential information on social media sites. Always protect your identity when using any social networking site.
The following IRS YouTube channels provide short, informative videos on various tax-related topics in English and ASL.
Over-the-Phone Interpreter (OPI) Service. The IRS offers the OPI Service to taxpayers needing language interpretation. The OPI Service is available at Taxpayer Assistance Centers (TACs), most IRS offices, and every VITA/TCE tax return site. This service is available in Spanish, Mandarin, Cantonese, Korean, Vietnamese, Russian, and Haitian Creole.
Accessibility Helpline available for taxpayers with disabilities. Taxpayers who need information about accessibility services can call 833-690-0598. The Accessibility Helpline can answer questions related to current and future accessibility products and services available in alternative media formats (for example, braille-ready, large print, audio, etc.). The Accessibility Helpline does not have access to your IRS account. For help with tax law, refunds, or account-related issues, go to IRS.gov/ LetUsHelp .
Alternative media preference. Form 9000, Alternative Media Preference, or Form 9000(SP) allows you to elect to receive certain types of written correspondence in the following formats.
Standard Print.
Large Print.
Braille.
Audio (MP3).
Plain Text File (TXT).
Braille-Ready File (BRF).
Disasters. Go to IRS.gov/DisasterRelief to review the available disaster tax relief.
Getting tax forms and publications. Go to IRS.gov/ Forms to view, download, or print all the forms, instructions, and publications you may need. Or you can go to IRS.gov/OrderForms to place an order.
Mobile-friendly forms. You’ll need an IRS Online Account (OLA) to complete mobile-friendly forms that require signatures. You’ll have the option to submit your form(s) online or download a copy for mailing. You’ll need scans of your documents to support your submission. Go to IRS.gov/MobileFriendlyForms for more information.
Getting tax publications and instructions in eBook format. Download and view most tax publications and instructions (including the Instructions for Form 1040) on mobile devices as eBooks at IRS.gov/eBooks .
IRS eBooks have been tested using Apple’s iBooks for iPad. Our eBooks haven’t been tested on other dedicated eBook readers, and eBook functionality may not operate as intended.
68 Chapter 12 How To Get Tax Help Publication 970 (2025)
Access your online account (individual taxpayers only). Go to IRS.gov/Account to securely access information about your federal tax account.
View the amount you owe and a breakdown by tax year.
See payment plan details or apply for a new payment plan.
Make a payment or view 5 years of payment history and any pending or scheduled payments.
Access your tax records, including key data from your most recent tax return, and transcripts.
View digital copies of select notices from the IRS.
Approve or reject authorization requests from tax professionals.
Get a transcript of your return. With an online account, you can access a variety of information to help you during the filing season. You can get a transcript, review your most recently filed tax return, and get your adjusted gross income. Create or access your online account at IRS.gov/ Account .
Tax Pro Account. This tool lets your tax professional submit an authorization request to access your individual taxpayer IRS OLA. For more information, go to IRS.gov/ TaxProAccount .
Using direct deposit. The safest and easiest way to receive a tax refund is to e-file and choose direct deposit, which securely and electronically transfers your refund directly into your financial account. Direct deposit also avoids the possibility that your check could be lost, stolen, destroyed, or returned undeliverable to the IRS. Eight in 10 taxpayers use direct deposit to receive their refunds. If you don’t have a bank account, go to IRS.gov/ DirectDeposit for more information on where to find a bank or credit union that can open an account online.
Reporting and resolving your tax-related identity theft issues.
Tax-related identity theft happens when someone steals your personal information to commit tax fraud. Your taxes can be affected if your SSN is used to file a fraudulent return or to claim a refund or credit.
The IRS doesn’t initiate contact with taxpayers by email, text messages (including shortened links), telephone calls, or social media channels to request or verify personal or financial information. This includes requests for personal identification numbers (PINs), passwords, or similar information for credit cards, banks, or other financial accounts.
Go to IRS.gov/IdentityTheft, the IRS Identity Theft Central webpage, for information on identity theft and data security protection for taxpayers, tax professionals, and businesses. If your SSN has been lost or stolen or you suspect you’re a victim of tax-related identity theft, you can learn what steps you should take.
Get an Identity Protection PIN (IP PIN). IP PINs are six-digit numbers assigned to taxpayers to help prevent the misuse of their SSNs on fraudulent federal income tax returns. When you have an IP PIN, it prevents someone else from filing a tax return with your SSN. To learn more, go to IRS.gov/IPPIN .
Ways to check on the status of your refund.
Go to IRS.gov/Refunds .
Download the official IRS2Go app to your mobile device to check your refund status.
Call the automated refund hotline at 800-829-1954.
The IRS can’t issue refunds before mid-February
! for returns that claimed the EITC or the additional¶
CAUTION child tax credit (ACTC). This applies to the entire
refund, not just the portion associated with these credits.
Making a tax payment. The IRS recommends paying electronically whenever possible. Options to pay electronically are included in the list below. Payments of U.S. tax must be remitted to the IRS in U.S. dollars. Digital assets are not accepted. Go to IRS.gov/Payments for information on how to make a payment using any of the following options.
- IRS Direct Pay : Pay taxes from your bank account. It’s
free and secure, and no sign-in is required. You can change or cancel within 2 days of scheduled payment.
- Debit Card, Credit Card, or Digital Wallet : Choose an
approved payment processor to pay online or by phone.
- Electronic Funds Withdrawal : Schedule a payment
when filing your federal taxes using tax return prepara- tion software or through a tax professional.
- Electronic Federal Tax Payment System : This is the
best option for businesses. Enrollment is required.
- Check or Money Order : Mail your payment to the ad-
dress listed on the notice or instructions.
- Cash : You may be able to pay your taxes with cash at
a participating retail store.
- Same-Day Wire : You may be able to do same-day
wire from your financial institution. Contact your finan- cial institution for availability, cost, and time frames.
Note: The IRS uses the latest encryption technology to ensure that the electronic payments you make online, by phone, or from a mobile device using the IRS2Go app are safe and secure. Paying electronically is quick and easy.
What if I can’t pay now? Go to IRS.gov/Payments for more information about your options.
- Apply for an online payment agreement ( IRS.gov/ OPA ) to meet your tax obligation in monthly installments if you can’t pay your taxes in full today. Once you complete the online process, you will receive immediate notification of whether your agreement has been approved.
Publication 970 (2025) Chapter 12 How To Get Tax Help 69
- Use the Offer in Compromise Pre-Qualifier to see if you can settle your tax debt for less than the full amount you owe. For more information on the Offer in Compromise program, go to IRS.gov/OIC .
Filing an amended return. Go to IRS.gov/1040X for information and updates.
Checking the status of your amended return. Go to IRS.gov/WMAR to track the status of Form 1040-X amended returns.
The Taxpayer Advocate Service (TAS) Is Here To Help You¶
What Is the Taxpayer Advocate Service?
The Taxpayer Advocate Service (TAS) is an independent organization within the Internal Revenue Service (IRS). TAS helps taxpayers resolve problems with the IRS, makes administrative and legislative recommendations to prevent or correct the problems, and protects taxpayer rights. We work to ensure that every taxpayer is treated fairly and that you know and understand your rights under the Taxpayer Bill of Rights. We are Your Voice at the IRS.
How Can TAS Help Me?
TAS can help you resolve problems that you haven’t been able to resolve with the IRS on your own. Always try to resolve your problem with the IRS first, but if you can’t, then come to TAS. Our services are free .
TAS helps all taxpayers (and their representatives), including individuals, businesses, and exempt organizations. You may be eligible for TAS help if your IRS problem is causing financial difficulty, if you’ve tried and been unable to resolve your issue with the IRS, or if you believe an IRS system, process, or procedure just isn’t working as it should.
To get help any time with general tax topics, visit www.TaxpayerAdvocate.IRS.gov . The site can help
you with common tax issues and situations, such as what to do if you make a mistake on your return or if you get a notice from the IRS.
- TAS works to resolve large-scale (systemic) problems that affect many taxpayers. You can report systemic issues at www.IRS.gov/SAMS . (Be sure not to include any personal identifiable information.)
How Do I Contact TAS?
TAS has offices in every state, the District of Columbia, and Puerto Rico. To find your local advocate’s number:
Check your local directory, or
Call TAS toll free at 877-777-4778.
What Are My Rights as a Taxpayer?
The Taxpayer Bill of Rights describes ten basic rights that all taxpayers have when dealing with the IRS. Go to www.TaxpayerAdvocate.IRS.gov/Taxpayer-Rights for more information about the rights, what they mean to you, and how they apply to specific situations you may encounter with the IRS. TAS strives to protect taxpayer rights and
!¶
CAUTION
It can take up to 3 weeks from the date you filed your amended return for it to show up in our sys- tem, and processing it can take up to 16 weeks.
Understanding an IRS notice or letter you’ve re- ceived. Go to IRS.gov/Notices to find additional information about responding to an IRS notice or letter.
IRS Document Upload Tool. You may be able to use the Document Upload Tool to respond digitally to eligible IRS notices and letters by securely uploading required documents online through IRS.gov. For more information, go to IRS.gov/DUT .
Schedule LEP. You can use Schedule LEP (Form 1040), Request for Change in Language Preference, to state a preference to receive notices, letters, or other written communications from the IRS in an alternative language. You may not immediately receive written communications in the requested language. The IRS’s commitment to LEP taxpayers is part of a multi-year timeline that began providing translations in 2023. You will continue to receive communications, including notices and letters, in English until they are translated to your preferred language.
Contacting your local TAC. Keep in mind, many questions can be answered on IRS.gov without visiting a TAC. Go to IRS.gov/LetUsHelp for the topics people ask about most. If you still need help, TACs provide tax help when a tax issue can’t be handled online or by phone. All TACs now provide service by appointment, so you’ll know in advance that you can get the service you need without long wait times. Before you visit, go to IRS.gov/TAC to find the nearest TAC and to check hours, available services, and appointment options. Or, on the IRS2Go app, under the Stay Connected tab, choose the Contact Us option and click on “Local Offices.”
—————————————————————
Below is a message to you from the Taxpayer Advocate Service, an independent organization established by Congress.
70 Chapter 12 How To Get Tax Help Publication 970 (2025)
ensure the IRS is administering the tax law in a fair and equitable way.
Publication 970 (2025) Chapter 12 How To Get Tax Help 71
Appendix¶
The following appendix is provided to help you claim the education benefits that will give you the lowest tax. It consists of a chart summarizing some of
the major differences between the education tax benefits discussed in this publication. It is intended only as a
guide. Look in this publication for more complete information.
72 Publication 970 (2025)
| Business deduction for work-related education | Individuals who are self- employed, Armed Forces reservists, qualified performing artists, fee- based officials, or disabled can deduct certain expenses | Amount of qualifying work-related education expenses | Transportation Travel Other necessary expenses |
|---|---|---|---|
| Employer- provided educational assistance† |
Employer benefits not taxed |
$5,250 exclusion | Books Supplies Equipment |
| Education savings bond program† |
Interest not taxed | Amount of qualified education expenses |
Contributions to Coverdell ESA Contributions to QTP |
| Education exception to additional tax on early IRA distributions† |
No 10% additional tax on early distribution |
Amount of qualified education expenses |
Books Supplies Equipment Room & board if at least half-time student Computer equipment, computer software, or Internet access and related services Expenses for special needs services Elem/ education: See chapter 8 Postsecondary credential: See chapter 8 |
| Qualified Tuition Program (QTP)† |
Earnings not taxed |
None | Higher education: Books Supplies Equipment Room & board if at least half-time student Computer equipment, computer software, or Internet access and related services Expenses for special needs services Elem/ education: See chapter 7 Postsecondary credential: See chapter 7 |
| Coverdell ESA† | Earnings not taxed |
$2,000 contribution per beneficiary |
Books Supplies Equipment Computer equipment, computer software, or Internet access and related services Expenses for special needs services Payments to QTP Higher education: Room & board if at least half-time student Elem/ education: See chapter 6 |
| Student loan interest deduction |
Can deduct interest paid |
$2,500 deduction | Books Supplies Equipment Room & board Transportation Other necessary expenses |
| Lifetime learning credit |
Credits can reduce the amount of tax you must pay |
$2,000 credit per tax return |
Amounts paid for required books, etc., that must be paid to the educational institution are required fees |
| American opportunity credit |
Credits can reduce the amount of tax you must pay 40% of the credit may be refundable (limited to $1,000 per student) |
$2,500 credit per student |
Course-related books, supplies, and equipment |
| Scholarships, fellowship grants, grants, and tuition reductions |
Amounts received may not be taxable |
None | Course-related expenses such as fees, books, supplies, and equipment |
| What is your benefit? |
What is the annual limit? |
What expenses qualify besides tuition and required enrollment fees? |
Publication 970 (2025) 73
| Business deduction for work-related education | Required by employer or law to keep present job, salary, status Maintain or improve job skills | Can’t be to meet minimum educational requirements of present trade/ business Can’t qualify you for new trade/ business | No phaseout | † Any nontaxable distribution is limited to the amount that doesn’t exceed qualified education expenses. |
|---|---|---|---|---|
| Employer- provided educational assistance† |
Undergraduate & graduate |
No other conditions |
No phaseout | No phaseout |
| Education savings bond program† |
Undergraduate & graduate |
Applies only to qualified series EE bonds issued after 1989 or series I bonds |
$99,500 – $114,500 $149,250 – $179,250 for joint returns |
$99,500 – $114,500 $149,250 – $179,250 for joint returns |
| Education exception to additional tax on early IRA distributions† |
Undergraduate & graduate K–12 Postsecondary credential |
No other conditions |
No phaseout | No phaseout |
| Qualified Tuition Program (QTP)† |
Undergraduate & graduate K–12 for no more than $10,000 of tuition Postsecondary credential |
No other conditions |
No phaseout | No phaseout |
| Coverdell ESA† | Undergraduate & graduate K–12 |
Assets must be distributed at age 30 unless special needs beneficiary |
$95,000 – $110,000 $190,000 – $220,000 for joint returns |
$95,000 – $110,000 $190,000 – $220,000 for joint returns |
| Student loan interest deduction |
Undergraduate & graduate |
Must have been at least half-time student in degree program |
$85,000 – $100,000 $170,000 – $200,000 for joint returns |
$85,000 – $100,000 $170,000 – $200,000 for joint returns |
| Lifetime learning credit |
Undergraduate & graduate Courses to acquire or improve job skills |
No other conditions |
$80,000 – $90,000 $160,000 – $180,000 for joint returns |
$80,000 – $90,000 $160,000 – $180,000 for joint returns |
| American opportunity credit |
Undergraduate & graduate |
Can be claimed for only 4 tax years Must be enrolled at least half-time in degree program No felony drug conviction(s) Must not have completed first 4 years of postsecondary education before end of preceding tax year |
$80,000 – $90,000 $160,000 – $180,000 for joint returns |
$80,000 – $90,000 $160,000 – $180,000 for joint returns |
| Scholarships, fellowship grants, grants, and tuition reductions |
Undergraduate & graduate K–12 |
Must be in degree or vocational program Payment of tuition and required fees must be allowed under the grant |
No phaseout | No phaseout |
| What education qualifies? |
What are some of the other conditions that apply? |
In what income range do benefits phase out? |
In what income range do benefits phase out? |
74 Publication 970 (2025)
Glossary¶
The education benefits included in this publication were enacted over many years, leading to a number of common terms being defined differently from one benefit to the next. For example, an eligible educational institution means one thing when determining if earnings from a Coverdell ESA aren’t taxable and something else when determining if a scholarship or fellowship grant isn’t taxable.
For each term listed below that has more than one definition, the definition for each education benefit is listed.
Academic period: A semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. If an educational institution uses credit hours or clock hours and doesn’t have academic terms, each payment period can be treated as an academic period.
Adjusted qualified education ex- penses (AQEE): Qualified education expenses (defined later) reduced by any tax-free educational assistance, such as a tax-free scholarship or employer-provided educational assistance. They must also be reduced by any qualified education expenses deducted elsewhere on your return, used to determine an education credit or other benefit, or used to determine a tax-free distribution. For information on a specific benefit, see the appropriate chapter in this publication.
Candidate for a degree: A student who meets either of the following requirements.
Attends a primary or secondary school or pursues a degree at a college or university.
Attends an accredited educational institution that is authorized to provide:
a. A program that is acceptable
for full credit toward a bachelor’s or higher degree, or
b. A program of training to pre pare students for gainful em
ployment in a recognized occupation.
Designated beneficiary: The individual named in the document creating the account/plan who is to receive the benefit of the funds in the account/ plan.
Eligible educational institution:
American opportunity credit. Any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions.
Coverdell education savings ac- count (ESA). Any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Also included is any public, private, or religious school that provides elementary or secondary education (kindergarten through grade 12), as determined under state law.
Education savings bond pro- gram. Same as American opportu- nity credit in this category.
IRA, early distributions from. Same as American opportunity credit in this category.
Lifetime learning credit. Same as American opportunity credit in this category.
Qualified tuition program (QTP). Generally, same as Coverdell edu- cation savings account (ESA) in this category.
Scholarships and fellowship grants. An institution that maintains a regular faculty and curricu
lum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities.
Student loan, cancellation of. Same as Scholarships and fellow- ship grants in this category.
Student loan interest deduc- tion. Any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Also included is an institution that conducts an internship or residency program leading to a degree or certificate from an institution of higher education, a hospital, or a health care facility that offers postgraduate training.
Eligible student:
American opportunity credit. A student who meets all of the following requirements for the tax year for which the credit is being determined.
Didn’t have expenses that were used to figure an American opportunity credit in any 4 earlier tax years.
Hadn’t completed the first 4 years of postsecondary education (generally, the freshman through senior years) in an earlier tax year.
For at least one academic period beginning in the tax year, was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential at an eligible educational institution.
Was free of any federal or state felony conviction for possessing or distributing a controlled
Publication 970 (2025) 75
school. Includes computer or peripheral equipment, computer software, or Internet access and related services. Many specialized expenses included for K–12. Also includes expenses for special needs services and contributions to a QTP.
Education savings bond pro- gram. Tuition and fees required to enroll at or attend an eligible educational institution. Also includes contributions to a QTP or Coverdell ESA. Doesn’t include expenses for room and board. Doesn’t include expenses for courses involving sports, games, or hobbies that aren’t part of a degree or certificate-granting program.
IRA, early distributions from. Tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution, including expenses incurred in connection with a recognized postsecondary credential program, plus certain limited costs of room and board for students who are enrolled at least half-time. Also includes expenses for special needs services incurred by or for special needs students in connection with their enrollment or attendance. Additionally, includes certain expenses in connection with the enrollment or attendance at an elementary or secondary school.
Lifetime learning credit. Tuition and certain related expenses required for enrollment or attendance at an eligible educational institution. Student activity fees and expenses for course-related books, supplies, and equipment are included only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance. Doesn’t include expenses for room and board. Doesn’t include expenses for courses involving sports, games, or hobbies (including noncredit courses) that aren’t part of the student’s postsecondary degree program, unless taken by the student to acquire or improve job skills.
Qualified tuition program (QTP). Tuition, fees, books, supplies, and
substance as of the end of the tax year.
Lifetime learning credit. A student who is enrolled in one or more courses at an eligible educational institution.
Student loan interest deduc- tion. A student who was enrolled at least half-time in a program leading to a postsecondary degree, certificate, or other recognized educational credential at an eligible educational institution.
Half-time student: A student who is enrolled for at least half the full-time academic workload for the course of study the student is pursuing, as determined under the standards of the school where the student is enrolled.
Modified adjusted gross income (MAGI):
American opportunity credit. Adjusted gross income (AGI) as figured on the federal income tax return, modified by adding back any:
Foreign earned income exclusion,
Foreign housing exclusion,
Foreign housing deduction,
Exclusion of income by bona fide residents of American Samoa, and
Exclusion of income by bona fide residents of Puerto Rico.
Coverdell education savings ac- count (ESA). Same as American opportunity credit in this category.
Education savings bond pro- gram. AGI as figured on the federal income tax return without taking into account any savings bond interest exclusion and modified by adding back any:
Foreign earned income exclusion,
Foreign housing exclusion,
Foreign housing deduction,
Exclusion of income by bona fide residents of American Samoa,
Exclusion of income by bona fide residents of Puerto Rico,
Exclusion for adoption benefits received under an employer’s adoption assistance program, and
Deduction for student loan interest.
Lifetime learning credit. Same as American opportunity credit in this category.
Student loan interest deduc- tion. AGI as figured on the federal income tax return without taking into account any student loan interest deduction, and modified by adding back any:
- Foreign earned income exclusion,
Foreign housing exclusion,
Foreign housing deduction,
Exclusion of income by bona fide residents of American Samoa, and
Exclusion of income by bona fide residents of Puerto Rico.
Phaseout: The amount of credit or deduction allowed is reduced when the MAGI is greater than a specified amount of income.
Qualified education expenses: See the pertinent chapter for specific items.
American opportunity credit. Tuition and certain related expenses (including student activity fees) required for enrollment or attendance at an eligible educational institution. Books, supplies, and equipment needed for a course of study are included even if not purchased from the educational institution. Doesn’t include expenses for room and board. Doesn’t include expenses for courses involving sports, games, or hobbies (including noncredit courses) that aren’t part of the student’s postsecondary degree program.
Coverdell education savings ac- count (ESA). Expenses related to or required for enrollment or attendance of the designated beneficiary at an eligible elementary, secondary, or postsecondary
76 Publication 970 (2025)
equipment required for enrollment or attendance at an eligible higher educational institution, plus certain limited costs of room and board for students who are enrolled at least half-time. Includes computer or peripheral equipment, computer software, or Internet access and related services. Also includes expenses for special needs services and computer access. Also, for amounts paid from distributions made after 2017, includes no more than $10,000 of elementary and secondary school (K–12) tuition incurred after 2017. Additionally, includes expenses related to enrollment or attendance at a postsecondary credential program.
Scholarships and fellowship grants. Expenses for tuition and fees required to enroll at or attend an eligible educational institution, and course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution. Course-related items must be required of all students in the course of instruction.
Student loan interest deduc- tion. Total costs of attending an eligible educational institution, including graduate school (however, limitations may apply to the cost of room and board allowed).
Recapture: To include as income on your current year’s return an amount allowed as a deduction in a prior year. To include as tax on your current year’s return an amount allowed as a credit in a prior year.
Rollover: A tax-free distribution to you of cash or other assets from a tax-favored plan that you contribute to another tax-favored plan.
Transfer: A movement of funds in a tax-favored plan from one trustee directly to another, either at your request or at the trustee’s request.
Publication 970 (2025) 77
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529 program ( See Qualified tuition program (QTP))
A
B
Coordination with qualified tuition
Bar review course 62 Bonds, education savings
program (QTP) 45 Defined 38 Distributions 43, 47
Overview (Table 6-3) 44 Divorce, transfer due to 43 Eligible educational institution 38 Figuring taxable portion of
Academic period :
American opportunity credit 12 Lifetime learning credit 23 Student loan interest deduction 31 Accountable plans 65, 66 Additional tax :
( See Education savings bond program) Business deduction for work-related
distribution 47 Losses 46 Modified adjusted gross income
Coverdell ESA:
distribution 44 Worksheet 6-3 48 Figuring the taxable earnings in required
On excess contributions 42 On taxable distributions 46 IRA distributions, education
exception 54 Qualified tuition program (QTP), on
education 59-67 Accountable plans 65, 66 Adjustments to qualifying work-related
education expenses 65 Allocating meal reimbursements 65 Deductible education expenses 63, 65 Deducting business expenses 66 Double benefit not allowed 64 Education required by employer or by
taxable distributions 53 Adjusted qualified education expenses
law 60 Education to maintain or improve
skills 60 Education to meet minimum
requirements 60-62 Education to qualify for new trade or
( See Qualified education expenses) AQEE 44, 54 Adjusted qualified higher education
business 62 Excess expenses, accountable plan 65 Indefinite absence 60 Maintaining skills vs. qualifying for new
Worksheet 6-3 to figure 48 Transfers 42 CPA review course 62 Credits :
(MAGI) 40 Worksheet 6-2 41 Overview (Table 6-1) 38 Qualified education expenses 38, 39 Rollovers 42 Tax benefit of 37 Tax-free distributions 44 Taxable distributions 44-46
expenses : AQHEE 45 American opportunity credit
work-related education) Designated beneficiary :
Adjustments to qualified education
American opportunity ( See American
expenses 13 Claiming dependent’s expenses 18, 19
job 60 Nonaccountable plans 66 Nondeductible expenses 63 Qualified education expenses 63, 65 Recordkeeping requirements 66 Reimbursements, treatment of 65, 66 Tax benefit of 59 Tax-free educational assistance 65 Teachers 61, 62 Temporary absence to acquire
opportunity credit) Lifetime learning ( See Lifetime learning
Tuition reduction 19 Claiming the credit 10, 11, 21
Qualifying to claim (Figure 2-1) 12 Contrast to the lifetime learning
credit) Cruises, educational 64
D
credits 73 Coordination with Coverdell ESA
distributions 45 Coordination with qualified tuition
program (QTP) distributions 52 Eligible educational institution 13 Eligible student 17
Requirements (Figure 2-2) 18 Expenses qualifying for 11, 15 Figuring the credit 19 Income level, effect on amount of
( See Student loan cancellation) Candidate for a degree :
Deductions ( See Business deduction for
education 60 Transportation expenses 63, 64 Travel expenses 64
Coverdell ESA 38, 43 Qualified tuition program (QTP) 49, 54 Disabilities, persons with :
C
Cancellation of student loan
Impairment-related work expenses 66 Distributions ( See specific benefit) Divorce :
credit 20 Income limits 20 Modified adjusted gross income
Scholarships and fellowship grants 5 Change of designated beneficiary :
American opportunity credit 19 Lifetime learning credit 28 Double benefit not allowed :
Coverdell ESA transfer due to 43 Expenses paid under decree:
(MAGI) 20 Modified adjusted gross income (MAGI)
Worksheet 2-1 20 Overview of American opportunity credit
Coverdell ESA 43 Qualified tuition program 54 Comprehensive or bundled fees :
American opportunity credit 17 Lifetime learning credit 27 Conventions outside U.S. 64 Coverdell education savings account
E
American opportunity credit 13 Lifetime learning credit 24 Student loan interest deduction 33 Work-related education 64
(Table 2-1) 10 Phaseout 20 Qualified education expenses 13 Tax benefit of 9 AQEE :
Early distributions from IRAs 54-56
Adjusted qualified education
(ESA) 37-48 Additional tax:
Eligible educational institution 55 Figuring amount not subject to 10%
expenses 44 AQHEE :
Adjusted qualified higher education
On excess contributions 42 On taxable distributions 46 Assets to be distributed at age 30 or
death of beneficiary 47 Contribution limits 40, 41
expenses 45 Armed Forces Health Professions
Figuring the limit (Worksheet 6-1) 41 Contributions to 39, 42
Table 6-2 39 Coordination with American opportunity
tax 55 Qualified education expenses 54 Reporting 56 Education IRA ( See Coverdell education
interest deduction)
Scholarship and Financial Assistance Program 8 Assistance ( See Tax help) Athletic scholarships 6
and lifetime learning credits 45
savings account (ESA)) Education loans ( See Student loan
78 Publication 970 (2025)
Education savings account
Lifetime learning credit 23 Student loan repayment assistance 37 Losses, deducting :
Coverdell ESA 46 Qualified tuition program (QTP) 53 Luxury water transportation 64
M
Worksheet 6-1 41 Education savings bond program 57 Lifetime learning credit 29
( See Coverdell education savings account (ESA)) Education savings bond program
Cashing in bonds tax free 56, 57 Claiming exclusion 58 Eligible educational institution 57 Figuring tax-free amount 58 Income level, effect on amount of
Mileage deduction for work-related
education 59, 64 Military academy cadets 7 Missing children, photographs of 3 Modified adjusted gross income
exclusion 58 Modified adjusted gross income
(MAGI) 57 Phaseout 58 Qualified education expenses 57 Educational assistance,
employer-provided ( See Employerprovided educational assistance) Eligible educational institution :
(MAGI) American opportunity credit 20 Coverdell ESA 40
American opportunity credit 13 Coverdell ESA 38 Early distributions from IRAs 55 Education savings bond program 57 Lifetime learning credit 23 Qualified tuition program (QTP) 49 Qualified tuition reduction 7 Scholarships and fellowship grants 5, 7 Student loan interest deduction 31 Eligible elementary or secondary
Form 5329 :
Coverdell ESA 46 Early distributions from IRAs 56 Qualified tuition program (QTP) 53 Form 8815 57, 58 Form W-9S 19, 29, 34 Fulbright grants 7
G
Glossary 3, 75-77 Graduate education tuition reduction 8 Grants :
Fulbright 7 Pell 7 Title IV need-based education 7
H
Work-related education deduction 66 Individual retirement arrangements
Half-time student :
American opportunity credit 17 Coverdell ESA 39 Early distributions from IRAs 55 Student loan interest deduction 31
I
Impairment-related work expenses :
Worksheet 3-1 29 Student loan interest deduction 34
Table 4-2 34
N
National Health Service Corps
Scholarship Program 6, 8 Nonaccountable plans :
Work-related education 66
school : Coverdell ESA 38 Eligible student :
L
(IRAs) ( See Early distributions from IRAs)
P
American opportunity credit 17 Lifetime learning credit 27 Student loan interest deduction 31 Employer-provided educational
Lifetime learning credit 22
Pell grants 7, 26 Performing artists, work-related
education deduction 66 Phaseout :
assistance 58 ESAs ( See Coverdell education savings
Academic period 23 Adjustments to qualified education
expenses 24 Claiming dependent’s expenses 28
account (ESA)) Estimated tax 3 Excess contributions :
American opportunity credit 20 Education savings bond program 58 Lifetime learning credit 29 Student loan interest deduction 34 Publications ( See Tax help)
Q
Coverdell ESA 42 Excess expenses, accountable plan 65 Expenses ( See specific benefit)
Tuition reduction 28 Claiming the credit 22, 23, 29
Qualifying to claim (Figure 3-1) 25 Contrast to the American opportunity
QESEE :
F
qualified elementary and secondary
Family members, beneficiary :
Coverdell ESA 43 Qualified tuition program (QTP) 54 Fee-basis officials, work-related
education expenses 45 Qualified education expenses 54
Adjustments to:
education deduction 66 Fellowship grants ( See Scholarships and
credit 73 Coordination with Coverdell ESA
distributions 45 Coordination with qualified tuition
program (QTP) distributions 52 Eligible educational institution 23 Eligible student 27 Expenses qualifying for 23-26 Figuring the credit 28 Income level, effect on amount of
credit 29 Income limits 29 Modified adjusted gross income
fellowship grants) Figures ( See Tables and figures) Figuring tax-free and taxable
(Worksheet 1-1) 6 Financial aid ( See Scholarships and
American opportunity credit 13-15 Coverdell ESA 44 Education savings bond program 57 Lifetime learning credit 24 Qualified tuition program (QTP) 51 Student loan interest deduction 32 Work-related education 65 American opportunity credit 13-15 Coverdell ESA 38, 39 Early distributions from IRAs 54 Education savings bond program 57 Expenses not qualified:
fellowship grants) Form 1098-E :
Student loan interest deduction 32, 34 Form 1098-T :
(MAGI) 29 Worksheet 3-1 29 Overview (Table 3-1) 22 Phaseout 29 Qualified education expenses 23, 26 Qualifying to claim (Figure 3-1) 25 Tax benefit of 22 Loans :
American opportunity credit 19 Lifetime learning credit 28 Form 1099-Q :
Coverdell ESA 42, 44 Qualified tuition program (QTP) 51 Form 1099-R :
Cancellation ( See Student loan
cancellation) Capitalized interest on student loan 32 Origination fees on student loan 32 Qualified education expenses paid with:
American opportunity credit 16, 17 Lifetime learning credit 27 Lifetime learning credit 23-26 Qualified tuition program (QTP) 49 Scholarships and fellowship grants 5 Student loan interest deduction 31 Work-related education 63-65
Early distributions from IRAs 56 Form 2106 64
American opportunity credit 12
Publication 970 (2025) 79
qualified elementary and secondary
education expenses : QESEE 45 Qualified elementary and secondary
Scholarships and fellowship grants 5,
Qualified tuition program (QTP) 53, 54
American opportunity credit:
Eligible student requirements (Figure
S
education expenses : Coverdell ESAs 39 Qualified employer plans :
2-2) 18 Overview (Table 2-1) 10 Qualifying to claim (Figure 2-1) 12 Comparison of education tax
Overview of American opportunity
credit (Table 2-1) 10 Overview of lifetime learning credit
Student loan interest deduction not
allowed 31 Qualified student loans 30, 31 Qualified tuition program (QTP) 49-54
benefits 73 Coverdell ESAs:
Additional tax on taxable
distributions 53 Change of designated beneficiary 54 Contributions to 51 Coordination with American opportunity
income (Worksheet 1-1) 6 Section 501(c)(3) organizations
26 Athletic scholarships 6 Eligible educational institution 5, 7 Qualified education expenses 5 Reporting 6 Scholarship, defined 5 Tax treatment of 5 Tax-free 5, 6 Taxable 6 Taxable scholarship and fellowship grant
Contributions to (Table 6-2) 39 Distributions (Table 6-3) 44 Overview (Table 6-1) 38 Education credits:
and lifetime learning credits 52 Coordination with Coverdell ESA
distributions 52 Defined 49 Eligible educational institution 49 Figuring taxable portion of
expenses 66 Service academy cadets 7 Sports, games, hobbies, and noncredit
( See Student loan cancellation) Section 529 program ( See Qualified
(Table 3-1) 22 Lifetime learning credit:
Overview (Table 3-1) 22 Qualifying to claim (Figure 3-1) 25 Student loan interest deduction:
tuition program (QTP)) Self-employed persons :
Deducting work-related education
MAGI, effect of (Table 4-2) 34 Overview (Table 4-1) 30 Summary chart of differences between
education tax benefits 73 Work-related education, qualifying
distribution 51 Losses 53 Recontribution 51 Rollovers 53, 54 Tax benefit of 49 Taxability of distributions 51-53 Taxable earnings 52 Transfers 53, 54 Qualified tuition reduction 7, 8 Qualified U.S. savings bonds 57 Qualifying work-related
courses : American opportunity credit 17 Education savings bond program 57 Lifetime learning credit 27 Standard mileage rate :
(Figure 11-1) 61 Tax help 67 Tax-free educational assistance :
Work-related education 59, 64 State prepaid education accounts
American opportunity credit 13 Coverdell ESA 44 Early distributions from IRAs 55 Education savings bond program 57 Lifetime learning credit 24 Qualified tuition program (QTP) 51 Work-related education 65 Taxable scholarships and fellowship
education 60-62 Determining if qualified (Figure 11-1) 61
( See Qualified tuition program (QTP)) Student loan cancellation 36
Section 501(c)(3) organizations 37 Student loan interest deduction
grants 6 Teachers 61, 62 Temporary-basis student,
R
Recapture :
Academic period 31 Adjustments to qualified education
American opportunity credit 14 Lifetime learning credit 26 Recordkeeping requirements :
expenses 32 Allocation between interest and
transportation expenses of 63 Title IV need-based education grants 7 Transfers
Work-related education 63, 64 Travel expenses :
Work-related education 66 Refinanced and consolidated student
principal 32 Claiming the deduction 35 Eligible educational institution 31 Eligible student 31 Figuring the deduction 33-35 Include as interest 32 Income level, effect on amount of
Coverdell ESA 42 Qualified tuition program (QTP) 53, 54 Transportation expenses
loans 32 Reimbursements
Nondeductible expenses 66 Work-related education 65, 66 Related persons :
Coverdell ESA 43 Qualified tuition program (QTP) 54 Student loan interest deduction 31 Repayment programs ( See Student loan
deduction 34 Loan repayment assistance 33 Modified adjusted gross income
American opportunity credit 19 Lifetime learning credit 28 Qualified 7, 8
50% limit on meals 64 Not deductible as form of education 64 Work-related education 64 Tuition reduction
U
U.S. savings bonds 57 Unclaimed reimbursement :
Work-related education 63
V
Veterans’ benefits 7
W
Withholding 3 Work-related education ( See Business
deduction for work-related education) Working condition fringe benefit 59
repayment assistance) Reporting
American opportunity credit 21 Coverdell ESA 42, 44, 46 Early distributions from IRAs 56 Education savings bond program 58 Lifetime learning credit 29 Qualified tuition program (QTP) 52, 53 Scholarships and fellowship grants,
taxable 6 Student loan interest deduction 35 Tuition reduction, taxable 8 Work-related education expenses 66 Revolving lines of credit, interest on 32 Rollovers
(MAGI) 34 Table 4-2 34 Not included as interest 33 Phaseout 34 Qualified education expenses 31 Qualified employer plans 31 Qualified student loans 30, 31 Reasonable period of time 31 Related persons 31 Student loan interest, defined 30, 33 Third-party interest payments 33 When interest must be paid 33 Worksheet 4-1 35 Student loan repayment assistance 37 Surviving spouse :
T
Tables and figures
Coverdell ESA transfer to 47
Coverdell ESA 42
80 Publication 970 (2025)
Worksheets :
Lifetime learning credit MAGI calculation
(Worksheet 3-1) 29 Scholarships and fellowship grants
(Worksheet 1-1) 6 Student loan interest deduction
American opportunity credit MAGI
calculation (Worksheet 2-1) 20 Coverdell ESA:
MAGI, calculation of (Worksheet
6-1) 41 Taxable distributions and basis
Contribution limit (Worksheet 6-2) 41
(Worksheet 6-3) 48
(Worksheet 4-1) 35
Publication 970 (2025) 81
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