Keep education receipts for tax credits or subtractions

The Minnesota Department of Revenue is reminding parents to save receipts from school supply purchases this year. Doing so could qualify parents for tax credits or subtractions on 2008 state income tax returns.

Minnesota has two tax provisions that help families pay expenses related to their child’s kindergarten through 12th grade education: the K-12 education credit and K-12 education subtraction. Both programs reduce the tax parents must pay and could provide a larger refund when filing a 2008 Minnesota Individual Income Tax Return. To qualify, a child must be attending kindergarten through 12th grade at a public, private or home school and parents must have purchased educational services or required materials during 2008 to assist with a child’s education.

Generally, most expenses paid for educational instruction or materials qualify, including purchasing paper, pens and notebooks; textbooks; rental or purchases of educational equipment such as musical instruments; computer hardware and educational software; after-school education, enrichment programs and summer school; and tutor fees. There are no income restrictions to qualify for the education subtraction; restrictions only apply to the education credit.

Qualifying Income Guidelines for Education Credit:

Number of qualifying children in K-12: Your household income must be less than:

1-2 $37,500

3 $39,500

4 $41,500

5 $43,500

6 or more $43,500 plus $2,000 for each