To be clear, the Form 8917 deduction only applies to the portion of tuition and fees mandated by the school before a student can register for classes. Therefore, the tuition and fees deduction does not cover incidental costs like housing, food, books, extracurriculars, or medical care.

Tax Form 8917 can be used to report academic periods from the prior calendar year and the first three months of the filing year. You can still deduct tuition paid for a dropped class even if the institution did not issue a refund during the withdrawal period.

The same Qualified Educational Expenses used to claim tax credits on Form 8863 cannot be utilised to claim a deduction on Form 8917. If you have filed Form 8863 for the federal school tax credit, you cannot file Form 8917 for a deduction.

The following conditions must be met before you can use Form 8917:

• Someone on your tax return (either you or your spouse) attended an eligible school during the year.
• To enrol in a postsecondary school, a student must have either a General Equivalency Diploma (GED) or a high school diploma.
• The kid was taking at least one class at the approved school.
• If you're single, your MAGI is less than $80,000; if you're married, it's less than $160,000.
• You are not relying solely on grants and scholarships to meet your educational expenses; you are providing some funding yourself.
• You are not eligible to be claimed as a dependent by anyone.

Instructions to Fill Form 8917

• So you want to use Form 8917 to get a tax break for tuition and fees, right? The form-filling process can finally begin. As with all IRS forms, you should read the instructions accompanying the form before filling it out. Check the associated eligibility conditions before you spend time filling out the form. The dotted line adjacent to line 36 of IRS Form 1040 is where you should enter any write-in adjustments you may have. Form 8917 needs that number if you file your taxes using Form 1040.
• Part a) and b) of Line 1 of Form 8917 is where you'll list the names and Social Security Numbers of any students living in your home. The revised qualified expenditures should be recorded in section c). To calculate this amount, you must "adjust" the tuition and fees paid in the applicable period(s) by subtracting the amount of any tax-free educational support received. If you received tax-free financial aid, the IRS would prefer that you not claim a deduction for the full amount of your tuition. To do so would be equivalent to doubling up on a tax break.
• What exactly is a tax-free scholarship or fellowship? The portion of a scholarship or fellowship award that is not subject to income tax, including the federal Supplemental Educational Opportunity Grant (Federal Pell Grant), the portion of an employer's educational assistance that is not subject to income tax, such as a continuing education allowance, educational assistance provided to veterans.
• For each student whose expenditures are being deducted, subtract the total amount of tax-free educational assistance from the total qualifying educational expenses. Add everything in 1 c) on line 2 and record the result. Don't forget that only tuition and fees belong in the "educational costs." Expenses like tuition, fees, and room & board are not tax deductible.
• Income from either line 22 of Form 1040 or line 15 of Form 1040A should be entered on line 3. Form 1040, lines 23 through 33, plus any write-in adjustments placed on the dotted line next to line 36 OR Form 1040A, lines 16 through 18 total, to be recorded on line 4.
• Subtract line 4 from line 3 on line 5, and so on. If your adjusted gross income (AGI) is more than $80,000 (or more than $160,000 if you're married and filing jointly), you cannot deduct tuition and fees using Form 8917.
• The deduction is entered at line 6. If you filled out line 5 and entered an amount, you must check to see if it is greater than $65,000 (or $130,000 if you are filing as a married couple). If yes, line 6 should have the lesser of line 2 or $2,000 entered. If not, enter the lesser of line 2 or $4,000 on line 6.

Qualified Education Expenses

Qualified education costs include tuition and fees associated with higher education. You can get reimbursed for these costs in two different ways:

American Opportunity Credit

• Only tuition and student activity expenses necessary for enrollment or attendance can be deducted.
• You can deduct the whole cost of required course materials, including books, supplies, and technology, from your tuition.

Lifetime Learning Credit

• Tuition and related fees can be deducted.
• Books, supplies, and equipment for a class can be reimbursed if they are required for enrollment or participation in the course.