Hylland Capital
The next generation in financial planning

Ask an Advisor Archive

Your Personal Finance Questions - Answered!

“What tax deductions are available for me if I am paying for my son’s college tuition?”

Today’s question is from someone who is currently paying for their child’s college expenses and looking to maximize their tax credits.

The question is:

“What tax deductions are available for me if I am paying for my son’s college tuition?”


There are numerous tax credits and deductions available, and some which will depend on which state you are in. I can’t get into all of the state’s tax benefits here. But here are a few of the main federal tax breaks you may qualify for.

First, the big one is the American Opportunity Tax Credit. This is a credit of up to $2,500 per year and is available for each person you are paying qualified education expenses for, so if you have 2 children, you may get up to a $5,000 tax credit.

This is only for those in undergrad, so it will not help you if you are in graduate school, and you can only claim it for 4 years for each student. So if your child takes an extra year to graduate, you will not get this credit for the 5th year.

The next credit available is the Lifetime learning credit. This is a credit of up to $2,000, and unlike the American opportunity credit, it can be used for graduate school, or a 5th year in undergrad. However, you can only apply for one of these credits, no matter how many people you are paying college expenses for. So if you have 2 kids in graduate school, you can still only claim this credit once.

Lastly, you get up to a $4,000 tax deduction for tuition and qualified expenses. Note that this is a deduction, not a credit, so it may not benefit you as much as the previous breaks. But, its certainly better than nothing.  

It is also worth noting that if your child is a dependent and you have co-signed their student loans, you can get a tax deduction of up to $2,500 for interest that you pay on those loans. So, if you are able to make interest payments on the loans while your child is still in school, you can deduct those costs and help them out by preventing the interest from building up.  

Matt Hylland