K–12 Education Subtraction and Credit

To claim either the subtraction or credit, you must have documentation (such as itemized receipts or invoices) to prove all specific qualifying expenses. Be sure to save your receipts and other documentation. The Minnesota Department of Revenue may ask you to provide these for review.

You may claim the subtraction and credit only to the extent of your actual expenses, and you cannot use the same expenses to claim both the subtraction and the credit.

We may require additional information, including the name of the organization or the qualified instructor to whom you paid fees for classroom or individual instruction.

To claim either the subtraction or credit, you must have paid qualifying expenses during the year to help your qualifying child’s K-12 education. For details, see the “Qualifying Child” and “Qualifying Expenses” sections.

What is the subtraction and who qualifies?
If you purchased educational material or services for your child’s K–12 education, you may be able to subtract your qualifying expenses from your taxable income (up to certain maximum amounts) when you file your Minnesota income tax return. 

Unlike the K-12 Education Credit, there is no income limit to qualify for the K–12 Education Subtraction. Although you may qualify for the subtraction regardless of your filing status, your child must have attended a school located in Minnesota, Iowa, North Dakota, South Dakota, or Wisconsin.

What is the credit and who qualifies?
The education credit is a refundable credit that reduces your state income tax liability. If you qualify, you may claim a credit on your Minnesota income tax return equal to 75% of the qualifying expenses you paid during the year for your child’s K–12 education, up to the maximum amounts. 

For tax years 2022 and earlier you must use household income to see if you qualify for the K-12 Education Credit. 

Generally, household income includes your Adjusted Gross Income (AGI) plus nontaxable income. To calculate household income, see the line instructions for Schedule M1ED, K-12 Education Credit.

To qualify for the education credit, your filing status must not be Married Filing Separately.

Additionally, your adjusted gross income must be below a certain limit for the year. 

Income requirements. To qualify for the credit, your adjusted gross income must be under a certain limit based on the number of qualifying children you have in grades K–12 (see Qualifying child).

A qualifying child must meet all of these requirements:

• Meet the definition of a qualifying child for the federal Earned Income Tax Credit
• Have been in grades K–12 during the year
• Have attended public or private school

These common expenses may qualify for the education credit or subtraction.

The year in which the payment was made determines when an expense qualifies. If the educational service or material was received in a year different than the year of payment, you may only claim the qualifying expense for the year in which the payment was made. This applies to both the subtraction and credit.

Determining year of payment for financed expenses
If you receive a loan from your local bank or use a third-party credit card to pay your qualifying expenses, your expenses are considered fully paid when you make the initial purchase. 

The opposite is true if you purchased a qualifying expense on credit directly from a retailer (such as a non-third-party credit card). In this case, your purchase is not fully paid when you make the initial purchase. Rather, each payment you make to the retailer is considered a separate expense. 

Example 1. Tammy bought a computer several years ago on credit using her personal credit card, and she’s still making payments on this purchase. In this case, because her initial purchase was made several years ago, it does not qualify for a credit or subtraction on this year’s income tax return.

Example 2. Charles received a loan from his local bank to pay educational expenses for his children. The expenses are considered to have been paid in the year they were made, regardless of when Charles paid back the loan. 

Example 3. Last October, Don purchased a computer on credit directly from the computer store. He made two payments on this credit during the year. Don may only include the amounts of the two payments, up to the maximums allowed, as qualifying expenses.

Example 4. Rita’s daughter took tutored classes in the fall, but she did not pay for the classes until January of the next year. For both the subtraction and credit, Rita’s qualifying expenses must be claimed in the year in which the fee is paid, not when the class is taken.

Subtraction limits
You may subtract your actual qualifying educational expenses, up to a maximum of $1,625 per qualifying child in grades K–6, and $2,500 for a qualifying child in grades 7–12. In the case where a child went from 6th grade to 7th grade during the calendar year, the maximum for that child is $2,500.

There is no family maximum subtraction, only a per-child maximum.

Credit limits
Your credit is limited to 75% of the qualifying expenses you paid during the year for your qualifying child’s K–12 education, up to the maximum amounts. You may not use the remaining 25% of qualifying expenses to claim the subtraction. 

The maximum credit you may claim is based on your adjusted gross income and number of qualifying children in grades K–12.

Your maximum credit limit is determined when you complete Schedule M1ED.

Limits to Computer Expenses
If you qualify and claim your computer-related expenses for both the subtraction and credit, you cannot claim more than your actual computer expenses or $400, whichever is less. You may split qualifying computer expenses between the credit and subtraction up to your actual computer expenses, but the most you can claim for each is:

• $200 of the expenses for the subtraction
• $200 of the expenses for the credit (if you meet the income requirements)

Education subtraction
To claim the education subtraction, determine the amount of your qualifying expenses and fill in the amount on the appropriate line of your Minnesota income tax return. 

Your subtraction must be based on your actual expenses during the year for which you have proof to substantiate your claim, such as cash register receipts and invoices. You are not required to submit the documentation with your return, but you are required to show it if we request it.

Note: If you qualify for both the subtraction and credit, you should first determine your credit. Once you reach the credit limits, you may take the remaining balance of your qualifying expenses, if any, as a subtraction.

Education credit
To determine your education credit, complete Schedule M1ED. Enter your credit amount on Schedule M1REF, Refundable Credits. Include both Schedule M1ED and Schedule M1REF when you file your Minnesota income tax return. 

If your credit is limited by the maximum amounts, you can then use the remaining qualifying expenses to claim the subtraction, up to the limits. You cannot claim both the subtraction and credit using the same expenses. Even though your credit is limited to 75% of your qualifying expenses, you cannot claim the remaining 25% as a subtraction.

If you file a return that fraudulently claims a credit or refund, including the K–12 Education Credit, we will assess you a penalty of 50% of the fraudulently claimed refund.

I home school my child. Am I eligible to claim the subtraction and credit?
Yes. If your qualifying child is in kindergarten through 12th grade, it does not matter if they are attending a public, private, parochial, or home school. You may claim your qualifying expenses. As a home school, you must annually report information regarding your program with your local public school district, and your program must meet the reporting requirements of Minnesota’s compulsory attendance laws.

For more information about qualifying home school expenses, see Income Tax Fact Sheet 8a, Qualifying Home School Expenses for K-12 Education Subtraction and Credit.

My child’s social studies class is taking a trip to Washington, D.C. to study our national government. What expenses qualify?
The amount paid for instruction qualifies if it is provided by a qualified instructor. Travel expenses, lodging, and meals do not qualify.

Can I claim expenses for my child who graduated from high school and entered college during the year?
Yes, but you may claim only the qualifying education expenses paid for and during their high school education.

Can I claim the full fee for sending my child to an academic camp?
No. Only the fee paid for instruction at the camp qualifies. For the instruction fee to qualify, your bill must separately list the qualifying expense (instruction fee) from the nonqualifying expenses, such as food, lodging, and transportation.

My child is taking dance classes from a qualified instructor. Do the fees qualify?
Yes. Fees paid for performing arts instruction qualify. The cost of costumes, shoes, props, and travel are not qualifying expenses.