All you need to know about Education Credits and Benefits

Tax Incentives for Saving for Higher Education

Exclusion for U.S. savings bond interest (Code Sec. 135 introduced by the Technical and Miscellaneous Revenue Act of 1988)

Eligibility for interest exclusion:

(1) Taxpayer must be at least age 24 in the year the bonds are purchased

(2) Bonds must be put in the name of the taxpayer or the joint name of taxpayer and spouse (i.e., bonds in the child's name not eligible for exclusion)

(3) Bonds must be used to pay higher education costs for the taxpayer, spouse and dependents

(a) Grandparents owning bonds cannot claim exclusion unless grandchildren are their dependents

(4) Bonds must be used only for qualified higher education costs

(a) Qualified costs include: tuition and fees for a college, university or vocation school that meets federal financial aid standards

(b) Qualified costs do not include room and board

(c) Qualified costs are reduced by tax-free scholarships or fellowship grants

(5) Exclusion can only be claimed by the parent if modified adjusted gross income (MAGI) does not exceed a set amount.

 

Estate Planning 

Qualified State Tuition Programs

Education IRAs

Tax Incentives for Paying for Higher Education

Lifetime Learning Credit

Penalty-free IRA Withdrawals

 

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