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Tax Benefits

Paying for college? You may have tax benefits waiting for you

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: