We highly recommend that families work with their tax advisor to determine the specifics.
The Private School Tuition Tax deduction (Schedule PS) begins in the 2014 tax year. Taxpayers can deduct up to $4,000 for tuition paid for dependent children in grades kindergarten through eighth and up to $10,000 for high school students. Since the tax break is set up as a deduction, the average Wisconsin family would get a $240 tax cut per elementary and middle school child and a $600 tax cut for each high school student.
Tax Deduction - NOT a Tax Credit
A tax deduction reduces an individual’s taxable income but cannot reduce taxable income below zero.
A tax credit directly reduces an individual’s tax bill dollar for dollar.
The amount that any one family or individual will save is dependent on income, how they file, and the resulting tax liability.
A couple makes $60,000 in income and spends $2,500 on tuition for their elementary school student in 2014. When the family files their taxes in 2015, their tax obligation is reduced from $3,762 to $3,605, a savings of $157.
What does a taxpayer need to do to claim the deduction?
Families should save payment records (receipts, etc.) as supporting documentation for their tax records. The parent will fill in the student’s name, social security number, grade, Grace's Federal Tax ID number and tuition paid. The tuition amounts for each student that the parents are claiming (up to the maximum deduction for each) will then be added together for the total deduction.
What expenses qualify?
Tuition includes any amount paid by the claimant for a pupil’s tuition to attend an eligible institution and mandatory book fees paid to the institution.
Tuition does NOT include amounts paid as a separate charge for items, such as: