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Higher Education Tax Credits

Woman doing her taxes at a laptop

Higher Education Tax Credits

Over the years, Congress has passed a number of tax incentives to help students and families offset the cost of a college education. Higher education tax incentives currently active (but set to expire at the end of 2012) include:

  • The American Opportunity Tax Credit
  • The expanded student loan interest deduction
  • Expanded Coverdell education savings accounts
  • Employer-provided educational assistance (Sec. 127) benefits

Also still in play are three expired provisions: the above-the-line deduction for qualified tuition and related expenses, the IRA Charitable Rollover, and the research and development tax credit. Congress could still extend these provisions and make them retroactive. There also is a movement in Congress supported by ACE to reform current tax incentives to create a simpler, consolidated higher education tax credit that would be a stronger, more effective tool for increasing access to college.