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Louisiana Offers School Tuition Tax Break
– September 15, 2009
The old Christmas song "It's the Most Wonderful Time of the Year" can now be applied to back to school time thanks to recent Louisiana tax incentives.
In 2008, the Louisiana legislature enacted a school tuition tax break which allows a deduction to lower Louisiana taxable income by qualifying tuition costs for any non-public school or any public school which is operated by a public college or university.
According to the statute, "Tuition shall include the following:
- The purchase of school uniforms required by schools for general day-to - day use.
- The purchase of textbooks, curricula, or other instructional materials required by schools.
- The purchase of school supplies required by schools."
Some frequently asked questions pertaining to the school tuition tax break are summarized below:
What grade levels does this include?
Elementary and secondary school tuition.
Must the child be my dependent?
As enacted, the law allows anyone who pays qualifying tuition to claim the deduction. However, current legislation being considered would require the child to be a dependent of the taxpayer.
What tax year is the deduction allowable on my tax return?
Act 8, Section 1, effective March 24, 2008, made the amounts paid on and after January 1, 2009, applicable for your 2009 tax returns. You are encouraged to save all of your receipts and information associated with your expenses in order to accurately complete your 2009 tax return.
How is my deduction calculated?
The deduction is equal to 50% of the actual amount of tuition and fees paid or incurred by the taxpayer per child or $5,000 per child, whichever is less. The deduction is also limited to the taxable income of the individual and cannot create a loss on the taxpayer's return.
Is the deduction phased out if I am in a high tax bracket?
No.
Is this deductible on my Federal tax return?
No. This deduction only applies to your Louisiana income tax return.
Does this lower my tax due to the State of Louisiana?
The provision is a deduction, not a credit. How much your tax liability will be reduced will be dependent on your marginal tax rate.
Is this deduction available for home-schooled children?
Yes, according to Louisiana Revised Statute 47:297.11
SUMMARY
- The deduction is effective beginning with the 2009 tax year for your 2009 Louisiana tax return due May 17, 2010.
- The school expense deductions are deductions, not tax credits. Eligible expenses will be reported on Schedule E of your Louisiana return as an adjustment to income.
- Taxpayers must retain all expense receipts as proof of the amounts paid.
We encourage you to take full advantage of this deduction if it is applicable to your situation.
Debbie Gibbs, CPA
Tax Department
318.429.2062
dgibbs@hmvcpa.com
Debbie is a senior in our Shreveport location tax department. Her primary focus is in Louisiana tax incentives and credits.
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