Parents, it’s back to school season again. As you plan how to make the most of your money here’s one tip that could help put some money back in your pocket.
What’s the tip? It’s simple, really.
Save your receipts.
This small step may help you claim a sizable tax credit called the Minnesota K-12 Education Credit. How do you tell if you can claim it? Why, I thought you’d never ask!
About the Minnesota K-12 Education Credit
Like many tax credits, there is a maximum household income limit for the K-12 Education Credit, which is $37,500 for families with one or two children. The max income limit increases by $2,000 for each additional child. (Is your income too high for the credit? Check out the K-12 Education Subtraction.)
If you meet the income requirements, you may claim a tax credit worth up to 75% of qualified educational expenses for your child in grades K-12. The most you can claim back is $1,000 for each child in grades K-12.
How it works
Let’s look at how the credit works with a typical back to school shopping list:
|Pencils, pens, erasers||$12|
|Crayons, markers, highlighters||$10|
|Notebooks, loose leaf paper, note cards||$8|
|3-ring binders, folders||$9|
|Scissors, glue, calculators||$11|
|Gym clothing (as required by the school)||$50|
|Home computer (up to $200 allowed to be claimed)||$200|
|Total educational expenses||$300|
|Total expenses multiplied by 75%||$225|
K-12 Education Credit amount: $225
In this example, a family spending $300 on educational supplies would get $225 back from the credit as long as they meet all the credit’s requirements.
Keep your receipts
To claim this credit save your receipts for when it’s time to file taxes and then keep them somewhere you can remember.
Use a shoebox, an envelope under the bed, your own unique filing system—whatever works for you—because in the case of an audit, you must prove you paid the expenses with itemized receipts or invoices or you risk facing a penalty of 50 percent of the fraudulently claimed refund.
It’s a refundable credit
Like the Earned Income Tax Credit, the K-12 Education Credit is a refundable credit, it can reduce the amount of taxes you owe or if you don’t owe any taxes, the credit can be returned to you as a direct refund.
In other words, even if you don’t need to file taxes, you should still file a tax return when you’re eligible for refundable credits like the K-12 Education Credit.
Filing a Minnesota tax return for free
If preparing on paper, you should complete Schedule M1ED to determine your credit amount and list the credit amount on Form M1. Alternatively, you can try myfreetaxes.com, which will allow you to file your state taxes online for free.
If you want in-person help to complete your return, Minnesota also has hundreds of locations where trained volunteer tax preparers can help you for free. Make sure you save the receipts of any expenses you think you can claim and have a trained tax preparer sort it out for you.
Additional information about the K-12 Education Credit
Since I can’t cover every aspect of taxes and tax credits on this blog, you should refer to the Minnesota Department of Revenue (MDOR) for complete information about state taxes and tax credits. For more info on this credit, MDOR has a K-12 Education Credit fact sheet, which lists if expenses are eligible or not for the credit.
If you have any questions about the Minnesota K-12 Education Credit feel free to ask in the comments below or on Claim it!’s Facebook page. I’d be happy to help you out.
About the author
Brian Kao is the Claim it! campaign manager and he’d love to hear from you! He enjoys helping people make sense of their own taxes and to keep more of their hard earned money.