Did you know many school supply purchases qualify for tax savings? If you have a child in grades kindergarten (K) through 12, holding on to receipts for education could really pay you back. The K-12 Education Credit and Subtraction can increase your refund up to $1,000 by helping reimburse the costs related to education.
You may not have heard about this program or how useful it is to save receipts to claim this credit. It can really make a difference, especially when your budget is tight. We want to help your family get the most from this valuable credit. Our guide below will help you find out if you can claim it and gives some helpful tips on easy ways to save your receipts.
If you paid qualifying education expenses for your qualifying child in grades kindergarten through grade 12, and saved your itemized receipts, you may be able to claim the Minnesota K-12 Education Credit.
Are you eligible? To claim the credit, you must have a qualifying child in grades K through 12. Your household income must be below $37,500 for families with one to two children. The income limit increases by $2,000 with each additional child beyond two. (Example: The income limit for a family with four qualifying children is $41,500.)
What is the maximum credit? For tax year 2018, the maximum K-12 Education Credit amount is $1,000 per child. The credit amount is up to 75% of qualifying expenses.
What expenses qualify?
- Paper, pens, pencils, notebooks, calculators and rulers
- Purchase or rental of musical instruments
- Transportation fees for school-time field trips
- After-school educational programs, tutoring, or academic summer camps
- Drivers education fees and supplies
- Computer hardware, educational software purchases (only up to $200 in computer and software expenses can be used to calculate the credit)
For the full list, visit www.revenue.state.mn.us.
What documents do you need? You must have itemized receipts of your educational expenses on record to claim this credit.
Tips to make tracking school supply costs much easier!
- Set up a folder for all your tax receipts. Be sure you mark a section for the K-12 Education Credit. Some people find it useful to have this near the kitchen or “landing pad” where you set your keys and bags when you get home. Our tax credit guide has information about other useful tax credits. For more detailed information on how to claim them check out our website youclaimit.org or call us at 651-262-2160.
- Set a reminder on your calendar for back-to-school shopping time. That way you are more likely to remember to save receipts at the check-out. Parents have so much going on everyday. It is hard to remember everything without a little extra help.
- Explore financial apps. Some apps like Expensify or Rydoo make it easy to store receipts without the paper. Others will help you track back to school expenses. For example, Mint allows you to tag your purchases, making it easier to keep track. But you still need to save those itemized receipts!
- Try classic organizing solutions. Use magnets on the fridge, a shoebox or a basket on your desk.
- Storing your receipts as pictures on your phone. This can be simple and effective! Many smartphones let you create folders to help make it even more organized at tax time.
- Get free envelopes from Minnesota Department of Revenue. You can request some from them or from Prepare + Prosper. Sometimes these and other materials are available at local libraries as well.
- Involve your kids. Use this as an opportunity to teach them about money matters. They can help you remember to save receipts.
- Spread the word and lean on other parents for help. Either in person or on social media, let fellow parents know this credit is available. Do staff at your school, neighbors, PTA members, or daycare providers know about this credit? Other moms and dads may have tips or ideas of their own that will make it easier for your family to fully benefit from the Minnesota K-12 Education Credit.
Make the most of this credit by filing for free! To locate a free tax preparation site call United Way 2-1-1 at 1-800-543-7709.