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Back to School Tax Reminder: Minnesota Education Credit and Subtraction
Back to School Tax Reminder: Minnesota Education Credit and Subtraction 265.09 KB
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This fact sheet talks about how you may be able to get a tax credit or subtraction for money you spent on school supplies.
Save Your School Supply Receipts for Your State Tax Return!
When you file your Minnesota state tax return, you might be able to claim a state tax credit OR a subtraction for costs that have to do with your child’s education. This covers children in kindergarten through high school.
Taking the credit lowers the amount of taxes you owe. If the credit is more than your taxes, you can get money back. But if you make too much money, you can’t claim the credit. In that case, you can use the subtraction.
The subtraction lowers your income so that you owe less in taxes. But you can’t get money back from using the subtraction.
In rare cases, you can claim the credit and the subtraction. Talk to a tax preparer if you have a child in high school and you pay for college courses or tuition at a private school.
Y our credit is limited to 75% of your qualifying expenses that you paid during the year for your qualifying child’s K–12 education, up to the maximum amounts. The remaining 25% of qualifying expenses cannot be used to claim the subtraction. The maximum credit is equal to $1,500 per child in the family but can be reduced if your adjusted gross income is above $70,000.
For example, if you have 1 or 2 qualifying children, you can claim all or part of the credit if your adjusted gross income is $76,000 or less. If you have more than 2 children, the income limit goes up by $3,000 for each additional child.
Check the chart Income Limits for the K-12 Education Credit on the Minnesota Department of Revenue site http://www.revenue.state.mn.us .
Note: For tax year 2022 and before, you have to use household income instead of adjusted gross income to figure out if you can get the credit.
If you are married and filing a separate return, you DON’T get the credit.
The Subtraction
Income doesn’t matter for the subtraction. The subtraction is limited to $1,625 for each qualifying child in grades K-6 and $2,500 for each qualifying child in grades 7-12.
For children in 6th and 7th grades, use the limit for the child’s grade level at the end of the tax year. For children who started college during the tax year, use the 12th grade limit. But you can only subtract qualifying education expenses from high school.
Also, to claim the subtraction, your child has to have gone to school in Minnesota, Wisconsin, Iowa, North Dakota, or South Dakota.
What do I need to claim the credit or subtraction?
To claim the credit or subtraction save all the receipts when you buy your children’s school supplies, including pencils, pens, crayons, notebooks, calculators, etc.
You can also claim expenses for things like:
- The cost of computer hardware and educational software (up to $200)
- Academic textbooks
- Fees paid to others for transportation
- Music lessons
- After school academic programs
- Academic summer camps
Some expenses count for the subtraction but not the credit. For example, you can use the expenses for private school tuition or college courses (while your child is in high school) only for the subtraction.
Some expenses can’t count towards either the credit or the subtraction. These include sports camps or lessons and travel expenses, lodging, and meals for overnight class trips.
To claim the credit , fill out Schedule M1ED with your Minnesota State Tax Form.
To take the subtraction when your household income is over the maximum for the credit, use the worksheets in the Schedule M1ED Instructions.
Remember you MUST keep the receipts from your purchases to claim the credit or subtraction. You can’t use the same expenses to claim both the credit and the subtraction.
More Information
For more information and a more detailed list of what expenses can be claimed go to the Minnesota Department of Revenue Website http://www.revenue.state.mn.us and enter the search term “Education Credit and Subtraction.”
You can also find fact sheets about expenses at:
www.revenue.state.mn.us/k-12-education-subtraction-and-credit-0 and www.revenue.state.mn.us/qualifying-home-school-expenses-k-12-education-subtraction-and-credit-0 .
To make sure you get the refund you should visit a free tax preparation site. To find a free site call (651) 297-3724 or (800) 543-7709.
Visit www.irs.gov/vita to learn more about Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE).
LSC's support for this website is limited to those activities that are consistent with LSC restrictions.
Spread the word to families about K-12 tax benefits
As you prepare for the upcoming school year, the Minnesota Department of Revenue would like your help informing families about two state programs: the Minnesota K-12 Education Credit and Subtraction . Many families do not know about, or take advantage of, these valuable tax benefits.
What should families know?
These benefits can reduce parents' taxes and increase their refund, but only if they save receipts for their qualifying education expenses.
Most Minnesota parents qualify for the K-12 Education Subtraction, which reduces their taxable income. Parents may also qualify for the K-12 Education Credit under certain income limits. The credit can refund up to 75% of parents' costs - even if they do not owe tax.
What education expenses qualify?
Most expenses for educational instruction or materials qualify, including:
- Pens and notebooks
- Rental or purchases of educational equipment, including musical instruments
- Computer hardware and educational software (up to $200 for the subtraction and credit)
- After-school tutoring and educational summer camps taught by a qualified instructor
How can I help inform parents?
Visit our K-12 Promotional Materials page to find handouts, sample messages, and our promotional video.
- Distribute the K-12 informational handout to families (also available in Spanish , Hmong , and Somali) .
- Post the sample messages on your social media accounts or school newsletters.
- Share the K-12 Education Tax Credit video with families.
If you have questions or need more information, contact us:
- Mathias Simon: [email protected] or 651-556-6616
- Michael Yang: [email protected] or 651-556-6613
- Yussuf Haji: [email protected] or 651-556-6654
- Daniela Paredes: [email protected] or 651-556-6954
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COMMENTS
To claim the Minnesota K-12 Education Expense subtraction on your Minnesota return, follow the steps below: State Section. Edit Minnesota state return. Subtractions from Income. K-12 Education Expense Subtraction. Complete the information on the following page. To claim the K-12 Education Expense Credit: State Section. Edit Minnesota state return.
Taxpayers may deduct up to $1,625 for students in grades K-6, and up to $2,500 for students in grades 7-12. Expenses qualifying for the deduction include tuition, transportation, textbooks, instructional materials, tutoring, academic summer school and camps, and up to $200 of the cost of a computer or education-related software.
Income requirements. To qualify for the credit, your household income must be under a certain limit based on the number of qualifying children you have in grades K–12 (see Qualifying child on the next page). If your total number of qualifying children is: Your household income limit is: 1 or 2 $37,500. 3 $39,500. 4 $41,500. 5 $43,500.
Talk to a tax preparer if you have a child in high school and you pay for college courses or tuition at a private school. The Credit. Your credit is limited to 75% of your qualifying expenses that you paid during the year for your qualifying child’s K–12 education, up to the maximum amounts.
Most expenses for educational instruction or materials qualify, including: Paper. Pens and notebooks. Textbooks. Rental or purchases of educational equipment, including musical instruments. Computer hardware and educational software (up to $200 for the subtraction and credit)