Is Private School Tuition Tax Deductible?

As a parent, you want the best education possible for your child. But as the person responsible for funding that education, you’re also probably looking for ways to ensure your family can afford it long-term — especially if you have more than one child enrolled. 

Whether your child is currently attending private school or you’re considering your options for the future, it’s important to know what tax breaks and other deductions might be available to you for private K–12 schooling. Here is some information to help answer a common question parents have regarding tuition: “Is private school tuition tax deductible?”

Coverdell Education Savings Accounts

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Generally speaking, private school tuition can’t be used to directly lower your tax liability. However, you may be able to take advantage of some tax relief through the government by means of Coverdell Education Savings Accounts, if available. These funds are also referred to as “ESAs.” 

Families can utilize a Coverdell Education Savings Account to grow with tax-free interest on their savings toward their child’s education. Any funds that have been contributed to an ESA (up to $2,000 per year) will accrue interest, tax-free. 

Distributions (or, the funds used from these accounts) won’t be taxed, so long as they’re used for the child’s educational expenses at a qualified educational institution. These approved expenses include tuition, books and other school-related materials required within the school’s program.

Families who’ve not yet enrolled their child into private K–12 school but know they will in the upcoming years can start saving in a Coverdell account early. The benefit of this option over a regular savings account is that the interest earned is tax-free, whereas other options may accrue interest and be taxed.

Other Tax-Deduction Alternatives

Another potential option for deducting some of your taxes is to take advantage of the Child and Dependent Care Credit. For schools that offer after-hours childcare services, some of the costs associated with that expense could be deductible for your family.

In order to qualify, families must pay for these childcare services separately from their other school expenses including tuition, books and other required materials.

Qualified families can claim the credit for childcare for a maximum of $3,000 for one child or $6,000 for two or more children and can be up to 35% of total qualifying expenses.

529 Education Savings

Similar to Coverdell (ESA) plans, families can also use funds saved from 529 plans toward K – 12 tuition fees. Each student is allotted up to $10,000 per year to be withdrawn from their accounts. With this particular plan, savings withdrawn must be used for tuition expenses only in order to remain tax-free, whereas ESAs can be used for books and other school supplies required for the program.

Tuition Assistance

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Many private schools offer tuition assistance for families that demonstrate financial need. Depending on the institution’s available abilities, resources and affiliations, the amount of financial support can vary.

At Foundation Academy, we offer tuition assistance applications through FACTS — our third-party vendor. To learn more, visit our Tuition Assistance FAQs now.