York College provides this information to students and parents solely for informational purposes and it is not intended to be tax or legal advice. For more information, see Tax Benefits for Education: Information Center or consult a qualified tax adviser.
The federal government has provided several ways in which your income tax burden can be reduced when you or your parents pay for your college education.
Detailed information regarding these benefits can be found online at http://www.irs.gov. You should request Publication 970.
A. American Opportunity Credit and B. Lifetime Learning Tax Credit
Federal tax law allows many families, subject to income limits, to use a percentage of the amount paid for college tuition as a tax credit when calculating federal income tax liability.
Student Loan Interest Deduction
Generally, personal interest you pay, other than certain mortgage interest, is not deductible on your tax return. However, if your modified adjusted gross income (MAGI) is less than $75,000 ($150,000) if filing a joint return), there is special deduction allowed for paying interest on a student loan (also known as an education loan) used for higher education. Student loan interest is interest you paid during the year on a qualified student loan. It includes both required and voluntary interest payments.
For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return before subtracting any deduction for student loan.
New York State Tax Benefits
New York State provides for a tax credit or deduction against income for college tuition payments. More information can be found at the above link.