Tax Savings for Education Expenses

There are both state and federal government tax benefits that help make higher education affordable. You may qualify for one or more of these tax savings.
Education Credits

529 Plans - Qualified State Tuition Programs

North Carolina's National College Savings Program offers multiple investment options with varying degrees of risk and potential rates of return. Nearly anyone can set up accounts and the earnings are tax-free when used to pay for education expenses. You can use the funds to pay educational expenses at most any college in the country and funds not used by the designated student can be transferred to another person. Learn more about why North Carolina's National College Savings Program is a great way to save for college!

American Opportunity Credit

The American Opportunity Credit replaces the former Hope Scholarship Tax Credit for tax years 2009 and 2010. Learn more about how you qualify for this annual tax credit or up to $2500 per eligible student.

Lifetime Learning Credit

Students who are enrolled at least part-time may be eligible for this credit of up to $2,000 per year. Learn more about the Lifetime Learning Credit.

Student Loan Interest Deduction

Taxpayers who have taken loans to pay the cost of attending a postsecondary institution (for spouse, dependent, or himself/herself) may deduct the interest they paid on the education loan(s). Click here for more information on who qualifies for this deduction.

Employer-Provided Educational Assistance

Employers may pay for college courses taken by their employees and the benefit is tax-free to employees! To learn more, click here.

Tax Deduction for Higher Education Expenses

Taxpayers with qualifying incomes may take deductions for qualified higher education expenses paid during the year. Click here for details on income qualifications and deduction amounts.