Back to School Credits and Deductions

August 17, 2015

Back to school time has snuck up on us yet again! Students are planning their schedules and making their way to schools across the state. While you are preparing yourself for the new school year, don’t forget that Indiana offers education related credits and deductions that may help make the most of your money.

Education Expenses Deduction – If you have a dependent child enrolled in K-12 private school or who is homeschooled, you may qualify for a deduction based on education expenditures for that child. Expenditures include tuition, fees, textbooks, and school supplies. If you are eligible, this deduction is $1,000 per qualified dependent. Details can be found in Information Bulletin #107.

School Scholarship Tax Credit – When you contribute to a qualified scholarship granting organization, the money provides K-12 scholarships for Hoosier children. Contributing can net a 50 percent credit against your state tax liability. There are no limits on the size of a qualifying contribution, but the entire tax credit program has a limit of $8.5 million in credits for this fiscal year. Your contribution also may qualify as an itemized deduction on your federal tax return. Check out the department of education’s school scholarship site for more details.

Indiana CollegeChoice 529 Investment Plan Tax Credit – If you make a contribution to a CollegeChoice 529 education savings plan, you can receive a 20 percent credit (up to $1,000) for contributions made this year. To contribute to a education savings plan you do not need to be a family member. Read the FAQ page on the Indiana Education Savings Authority website for information.

Tax Credit for College Donations - This donation may get you a state credit and a deduction on your federal tax return. Making a contribution to support any Indiana higher education institution could net you up to a $100 credit (if filed singly) or a $200 credit (if filed jointly) when you file your state tax return. You’ll get a bigger bang for your buck if you itemize deductions on your federal tax return. More state credit details for this donation can be found in Information Bullentin #14.

New for 2015!

Public School Educator Expense Credit – Any eligible educator working for an Indiana school corporation is entitled to a credit for qualified expenses paid for certain classroom supplies. This credit can be as much as $100 or $200 if you are married and both spouses meet the requirements.

Public K-12 Education Fund Donation – This new credit and refund donation gives you the option to contribute some, or all, of your state refund to the Public K-12 Education Fund. Be sure to check back later this year for more details about this new credit.

In order to take advantage of these credits/deductions on your 2015 Indiana individual income tax return, be sure to make your contributions and payments between now and Dec. 31, 2015. Your donation/contribution can help you and students throughout Indiana!