I have been dealing with clients who have a child in college and another chasing a certificate program. They have been talking to others and believe that everything will be tax deductible and are wondering what kind of refund they can look forward to. I have been trying to explain that is does not work quite that easily.
So I have been attempting to explain how the Hope and Lifetime learning credit work and how their 529 Saving Plan works within the confines of these credits.
First off we need to verify that the program qualifies for either the credit or the ability to use the 529 funds. The IRS has issued this as a guideline.
Eligible educational institution. For purposes of a Qualified Tuition Program (QTP), this is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. The educational institution should be able to tell you if it is an eligible educational institution.
So long as the education source meets the US Department of Education standards you can use either the credit or the 529 funds. Possibly both if you pay additional cash beyond 529 plan funds.
For further discussions on your personal, schedule an appointment.