Homeschooling is rewarding in a lot of ways, but the cha-ching of recouping educational expenses during tax season isn’t one of the rewards.
The federal government does not offer tax credits to homeschoolers because it does not recognize a homeschool as a school. It also does not give homeschool parents the opportunity to write off expenses.
Carol Topp is a retired homeschool mom and certified public accountant. The author of several homeschooling books on money management, Topp blogs about homeschooling and taxes at Homeschool CPA.
“Your homeschooling expenses are considered personal expenses,” Topp said on episode 11 of her podcast the Dollars and Sense Show. “Kind of like we can’t write off our food and we can’t write off our clothes, we can’t write off what the IRS considers your personal expenses and lower your taxes that way.”
The situation is a Catch-22 for homeschoolers. The federal government won’t reimburse parents for contributing to their children’s education, yet homeschool parents have no choice but to purchase the curriculum, books, microscopes, art supplies, and other equipment their children need.
However, homeschool families in certain states, as well as families who have children with special needs, can qualify for educational tax breaks.
The 5 Homeschool-Friendly States
The five states that currently offer tax credits for homeschooling include Arizona, Iowa, Illinois, Louisiana, and Minnesota. For details on what these states offer, see Home School Legal Defense Association’s article, Education Tax Credits.
Tax Credits for Special Needs Kids
You can also qualify for a tax benefit if you have a child with a severe learning disability, such as ADHD, or other physical, mental, or emotional impairments. If you think this benefit applies to you, research tax breaks for special needs children before filing your annual return. If you’ve already filed this year and didn’t factor in this tax benefit, you’re not out of luck, however. The IRS allows taxpayers to file amended returns and collect refunds for unclaimed tax benefits for up to three years.
Another blessing for homeschool families may be on its way: The Home School Equity Act for Tax Relief of 2013.
The Home School Equity Act for Tax Relief of 2013
The Home School Equity Act for Tax Relief of 2013 was introduced in the U.S. House of Representatives on May 7, 2013. HR 1850 would allow homeschool parents to take the Educator Expense deduction. HR 1850 was assigned to a congressional committee, which will consider it before possibly sending it on to the House or Senate as a whole. The bill was a re-introduction of HR 5963 from the previous session of Congress. Read the text of The Home School Equity Act for Tax Relief.
Do you get a homeschool tax break in your state or a tax benefit for a special needs child? Share below.