Tax Benefits

Tax benefits 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.

Current tax credits available

• The American Opportunity Credit
• The Lifetime Learning Credit

Other benefits

• Student loan interest deduction
• Tax-free treatment of a cancelled student loan
• Tax-free student loan repayment assistance
• Tuition and Fees for education deduction
• Establish and contribute to a Coverdell Education Savings Account (ESA) which features tax-free earnings
• Participate in a qualified earnings program, also referred to as a 529 Savings Plan, which features tax-free earnings
• Take early distributions from any type of individual retirement arrangement (IRA) for education costs without paying the 10% additional tax on early distributions
• Cash in savings bonds for education costs without having to pay tax on the interest
• Receive tax-free educational benefits from your employer
• Take a business deduction for work-related education

More information on these benefits are available on the following websites provided by the Internal Revenue Service:

• Tax Information for Students
• Tax Benefits for Education