Tax Credits and DeductionsAcademic Excellence :

Tax Credits:  (M.S. 290.0674) were enacted by the 1997 Legislature and first took effect for 1998

Families with school-age children and incomes at or below $33,500 per year may qualify for a tax credit of up to $1,000 per child ($2,000 per family) to reimburse them for certain educational expenses, including tutoring, academic summer camps, enrichment programs, textbooks and instructional materials, home computer hardware, educational software, and some expenses associated with individual schools.

In 2005, the education credit's household income (federal adjusted gross income plus most nontaxable income) limit is based on the number of qualifying children you have in kindergarten through grade 12.  If you have two or less qualifying children, your 2005 household income (your federal adjusted gross income plus most nontaxable income) must be less than $37,500.  The household income limit increases by $2,000 for each additional qualifying child.

Filing status cannot be Married Filing Separately.

Tax Deductions:  (M.S. 290.01, subd. 19b) were first enacted in 1995 and were most recently modified by the 1997 legislature.  They are available to all families, regardless of income and regardless of whether they itemize on their tax returns.

In 1997, deductions for each dependent child in kindergarten through sixth grade were increased from a maximum deduction of $650 to $1,625; deductions for each dependent child in grades 7 to 12 increased from a maximum of $1,000 to $2,500.

Minnesota Department of Revenue fact sheet on the educational tax credit and the education tax deduction (also called a subtraction) can be found at the Minnesota Department of Revenue web site.