Often reporters are among the first to know something. Once in a while, they are the last. This might be a case of the latter. Four minutes before clicking send on my 2011 TurboTax tax return, the program asked me if I had any qualified education expenses for my K-12 children, including music lessons and music instrument rental. That was news to me, and I gladly took advantage of the last-minute advice and lowered my state tax debt a la my fifth-grader's trumpet and trumpet lessons.
Minnesota is unique, nationally, in allowing parents to claim education-related expenses to qualify for either a credit or income deduction on their state tax forms. (There is no comparable federal benefit.) A recent legislative analysis showed the state as only one of 10 with any kind of tax benefit for education-related expenses. In Minnesota, those expenses include:
- Tuition, including nonpublic school, after-school enrichment, academic summer camps (not sports camps), music lessons, and tutoring.
- Textbooks, including instructional materials and supplies, musical instrument rental and purchase, and up to $200 of computer hardware and educational software.
- Transportation (paid to others for transporting children to school).
Those expenses (except for nonpublic school tuition) can be used by lower-income families to earn an education tax credit of up to $1,000 per K-12 child. For middle- and upper-income families, all of these expenses can be used to deduct their taxable income by up to $2,500 per child in grades 7-12, and up to $1,625 per child in grades K-6.
In tax year 2009, roughly 176,000 Minnesotans claimed the deduction, and 55,958 Minnesotans claimed the credit. The total credit that year amounted to $14.7 million -- or $262 per household that claimed it, according to the legislative analysis.
So if you haven't filed yet, take a second before the deadline and review the state guidance about kids' education expenses. Whether your daughter's violin playing sounds like a beautiful melody or a shrieking cat, the instrument and lessons might have a little extra payback!