The vendor should provide an itemized receipt allocating the purchase price to the various package items. If an item within the package is not clearly identifiable on the receipt, we may not allow the K-12 Education Credit for that item.
This allocation must be based on the fair market value (FMV) of the items in the bundled package. Vendors use this formula for allocation:
(FMV of each item you received / Total FMV of all items you received) x Your purchase price
The total purchase price must be allocated to all items you received, including vendor-provided “gift” items (conditioned on the purchase of other items). The vendor does not need to allocate individual goods and services with a FMV of less than 2% of the total purchase price.
Your expenses for these educational goods or services only qualify if you paid them to the vendor during the tax year that you claim the credit.
Example
You purchased a $600 educational program from ABC Summer Camp for your qualifying child. The camp provided you with an itemized receipt for this purchase.
| ABC Summer Camp - Sample Receipt |
|
|---|
| Actual cost of program |
$600 |
| Cost of administrative fees, room and board |
$150 |
Cost of qualifying expenses (Fees paid to a qualified instructors)
Amount eligible for the Minnesota Education Credit |
$450 eligible amount |
Amount reimbursed by the K-12 Education Credit
Program - room and board = |
$337.50 75% of eligible amount |
| Amount of loan (for assignment) |
$600 |
| Amount of repayment not covered by the K-12 Education Credit |
$262.50 |
