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taxmap/pubs/p970-000.htm#en_us_publink1000177955
Publication 970

Tax Benefits for Education

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Future Developments(p2)

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For the latest information about developments related to Pub. 970, such as legislation enacted after it was published, go to www.irs.gov/pub970.

What's New(p2)

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Form 1098-T requirement.(p2)
For tax years beginning after June 29, 2015, generally tax year 2016 returns for most taxpayers, the law requires a taxpayer (or a dependent) to have received a Form 1098-T from an eligible educational institution in order to claim the tuition and fees deduction, American opportunity credit, or the lifetime learning credit. However, for tax year 2016, a taxpayer may claim one of these education benefits if the student does not receive a Form 1098-T because the student’s educational institution is not required to send a Form 1098-T to the student under existing rules (for example, if the student is a nonresident alien, has qualified education expenses paid entirely with scholarships, or has qualified education expenses paid under a formal billing arrangement). If a student’s educational institution is not required to provide a Form 1098-T to the student, a taxpayer may claim one of these education benefits without a Form 1098-T if the taxpayer otherwise qualifies, can demonstrate that the taxpayer (or a dependent) was enrolled at an eligible educational institution, and can substantiate the payment of qualified tuition and related expenses.
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Ban on claiming the American opportunity credit.(p2)
If you claim the American opportunity credit even though you're not eligible, you may be banned from claiming the credit for up to 10 years. See the Caution statement under Introduction in chapter 2.
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Taxpayer identification number needed by due date of return.(p2)
If you don’t have a taxpayer identification number (TIN) by the due date of your 2016 return (including extensions), you can’t claim the American opportunity credit on either your original or an amended 2016 return, even if you later get a TIN. Also, the American opportunity credit isn’t allowed on either your original or an amended 2016 return for a student who doesn’t have a TIN by the due date of your return (including extensions), even if that student later gets a TIN.
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Lifetime learning credit.(p2)
For 2016, the amount of your lifetime learning credit is gradually reduced (phased out) if your modified adjusted gross income (MAGI) is between $55,000 and $65,000 ($111,000 and $131,000 if you file a joint return). You can't claim a credit if your MAGI is $65,000 or more ($131,000 or more if you file a joint return). For more information, see chapter 3. The American opportunity credit MAGI limits are unchanged (see chapter 2).
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Student loan interest deduction. (p2)
For 2016, the amount of your student loan interest deduction is gradually reduced (phased out) if your MAGI is between $65,000 and $80,000 ($130,000 and $160,000 if you file a joint return). You can't claim the deduction if your MAGI is $80,000 or more ($160,000 or more if you file a joint return). See chapter 4 for more information.
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Education savings bond program.(p2)
For 2016, the amount of your education savings bond interest exclusion is gradually reduced (phased out) if your MAGI is between $77,550 and $92,550 ($116,300 and $146,300 if you file a joint return). You can't exclude any of the interest if your MAGI is $92,550 or more ($146,300 or more if you file a joint return). See chapter 10 for more information.
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Business deduction for work-related education.(p2)
For 2016, if you drive your car to and from school and qualify to deduct transportation expenses, the amount you can deduct for miles driven from January 1, 2016, through December 31, 2016, is 54 cents a mile. See chapter 12 for more information.

Reminders(p2)

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Form 1098-T, Tuition Statement.(p2)
When figuring an education credit or tuition and fees deduction, use only the amounts you paid and are deemed to have paid during the tax year for qualified education expenses. In most cases, the student should receive Form 1098-T from the eligible educational institution by January 31, 2017. An institution may choose to report either payments received during calendar year 2016 (box 1), or amounts billed during the calendar year 2016 (box 2), for qualified education expenses. However, the amounts on Form 1098-T, boxes 1 and 2, might be different than the amount you actually paid and are deemed to have paid. In addition, the Form 1098-T should give you other information for that institution, such as adjustments made for prior years, the amount of scholarships or grants, reimbursements, or refunds, and whether the student was enrolled at least half-time or was a graduate student. The eligible educational institution may ask for a completed Form W-9S, Request for Student's or Borrower's Taxpayer Identification Number and Certification, or similar statement to obtain the student's name, address, and taxpayer identification number.
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Coordination with Pell grants and other scholarships or fellowship grants.(p3)
It may benefit you to choose to include otherwise tax-free scholarships or fellowship grants in income. This may increase your education credit and lower your total tax or increase your refund. See Coordination with Pell grants and other scholarships or fellowship grants throughout this publication.
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Hope scholarship credit.(p3)
For 2016, the Hope scholarship credit isn't available. However, you may be able to claim an American opportunity or lifetime learning credit. See chapter 2 and chapter 3 for more information.
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Achieving a Better Life Experience (ABLE) account.(p3)
This is a savings account for individuals with disabilities and their families. Distributions are tax free if used to pay the beneficiary's qualified disability expenses, which may include education expenses. For more information, see Pub. 907, Tax Highlights for Persons With Disabilities.
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Estimated tax payments.(p3)
If you have taxable income from any of your education benefits and the payer doesn't withhold enough income tax, you may need to make estimated tax payments. For more information, see Pub. 505, Tax Withholding and Estimated Tax.
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Photographs of missing children.(p3)
The Internal Revenue Service is a proud partner with the National Center for Missing & Exploited Children® (NCMEC).Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

taxmap/pubs/p970-000.htm#en_us_publink1000273659Introduction

This publication explains tax benefits that may be available to you if you are saving for or paying education costs for yourself or, in many cases, another student who is a member of your immediate family. Most benefits apply only to higher education.
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What is in this publication.(p3)

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Chapter 1 explains the tax treatment of various types of educational assistance, including scholarships, fellowship grants, and tuition reductions.
Two tax credits for which you may be eligible are explained in chapter 2 and chapter 3. These benefits, which reduce the amount of income tax you may have to pay, are:
Ten other types of benefits are explained in chapters 4 through 12. These benefits, which reduce the amount of income tax you may have to pay, are:
Note.You generally can't claim more than one of the benefits described in the list above for the same qualifying education expense.
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Comparison table.(p3)
Some of the features of these benefits are highlighted in Appendix B, later, in this publication. This general comparison table may guide you in determining which benefits you may be eligible for and which chapters you may want to read.
Deposit
When you figure your taxes, you may want to compare these tax benefits so you can choose the method(s) that gives you the lowest tax liability. If you qualify, you may find that a combination of credit(s) and deduction(s) gives you the lowest tax.
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Analyzing your tax withholding.(p3)

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After you estimate your education tax benefits for the year, you may be able to reduce the amount of your federal income tax withholding. Also, you may want to recheck your withholding during the year if your personal or financial situation changes. For more information, see Pub. 505, Tax Withholding and Estimated Tax.
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Glossary.(p4)

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In this publication, wherever appropriate, we have tried to use the same or similar terminology when referring to the basic components of each education benefit. Some of the terms used are:
Even though the same term, such as qualified education expenses, is used to label a basic component of many of the education benefits, the same expenses aren't necessarily allowed for each benefit. For example, the cost of room and board is a qualified education expense for the qualified tuition program, but not for the education savings bond program.
Many of the terms used in the publication are defined in the glossary near the end of the publication. The glossary isn't intended to be a substitute for reading the chapter on a particular education benefit, but it will give you an overview of how certain terms are used in discussing the different benefits.
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Comments and suggestions.(p4)

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We welcome your comments about this publication and your suggestions for future editions.
You can send us comments from irs.gov/formspubs. Click on "More Information" and then on "Give us feedback."
Or you can write to:

Internal Revenue Service
Tax Forms and Publications
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224


We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.
Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products.
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Ordering forms and publications.(p4)
Visit irs.gov/formspubs to download forms and publications. Otherwise, you can go to irs.gov/orderforms to order current and prior-year forms and instructions. Your order should arrive within 10 business days.
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Tax questions.(p4)
If you have a tax question not answered by this publication, check IRS.gov and How To Get Tax Help at the end of this publication.

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Useful items

You may want to see:


Publication
 463  Travel, Entertainment, Gift, and Car Expenses
 525  Taxable and Nontaxable Income
 550  Investment Income and Expenses
 590-A  Contributions to Individual Retirement Arrangements (IRAs)
 590-B  Distributions from Individual Retirement Arrangements (IRAs)
Form (and Instructions)
 1040: U.S. Individual Income Tax Return
 1040A: U.S. Individual Income Tax Return
 1040EZ: Income Tax Return for Single and Joint Filers With No Dependents
 1040NR: U.S. Nonresident Alien Income Tax Return
 1040NR-EZ: U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents
 2106: Employee Business Expenses
 2106-EZ: Unreimbursed Employee Business Expenses
 5329: Additional Taxes on Qualified Plans and Other Tax-Favored Accounts
 8815: Exclusion of Interest From Series EE and I U.S. Savings Bonds Issued After 1989
 8863: Education Credits
 8917: Tuition and Fees Deduction
 Schedule A (Form 1040): Itemized Deductions

See chapter 13 for information about getting these publications and forms.