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Question

What are qualified expenses?

Answer

As defined in IRS Publication 970, qualified expenses are tuition and expenses related to enrolling in and attending post-secondary education. These expenses must relate to an academic period that begins during the tax year or in the first three months of the following year.

The following expenses are not qualified expenses:

• Room and board
• Transportation
• Insurance
• Medical expenses
• Student fees, except when they are a condition of enrollment or attendance
• Expenses paid with non-taxable funds or tax-free educational assistance
• Same expenses used for any other tax deduction, credit or educational benefit

With the AOTC, qualified tuition and related expenses also include books, supplies, and equipment that are not purchased from the educational institution.

Related topic: Qualified expenses for education credits FAQs (1040)

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