Qualified education expenses are education-related expenses for which a student or the parent of a dependent student can claim and educational tax benefit. As grad students have educational expenses associated with their role as students (even if the expenses are paid on their behalf), they can always reduce their tax burden using their qualified education expenses.
The precise definition of what does and does not constitute a qualified education expense varies based on the type of educational tax benefit being claimed. Publication 970 (p. 4) explains:
“Even though the same term, such as qualified education expenses, is used to label a basic component of many of the education benefits, the same expenses aren’t necessarily allowed for each benefit.”
The IRS website has a one-page overview of what is and what is not a qualified education expense. The lists include both general expenses that are always considered or always not considered qualified education expenses as well as the special cases for specific tax benefits.
The qualified education expenses that balance against scholarships and fellowships paid to students to make the scholarships and fellowships tax-free are defined on p. 6 of Publication 970:
The qualified education expenses that qualify for the Lifetime Learning Credit are defined on p. 23 and 27 of Publication 970:
The qualified education expenses that qualify for the tuition and fees deduction are defined on p. 39 and 42 of Publication 970:
We at Grad Student Finances are not tax professionals, and none of the content in this section should be taken as advice for tax purposes.
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