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before the end of this year. Ditto for American school, but most of your more valuable one is called the
pre-paying state income taxes. checks are written to yeshiva. Are American Opportunity tax credit.
those deemed to have been paid to the Planning can be critical here, as you
Earned Income Credit American college? Do they need to be? are juggling various expenses and vari-
The earned income credit is the magi- ous years. It is very easy to blow a few
cal government handout program, in The earned income credit thousand dollars. There is a lot to say
which the government gives the work- here, but basically, the credit is limited
ing poor with children extra refunds. is the magical to four years. For the first four years,
How much? It can be over $6,000 if you can get a credit worth $2,500 if
you have three children. And that is government handout you spend at least $4,000 on tuition,
just the federal government. The state fees, and supplies. Spending over
of Maryland will add to that upwards of program, in which the $4,000 is not helpful, so watch your
$1,500. Your children must have a expenses and the timing.
social security number. But there is a government gives the
new law: If that number was issued You need to be enrolled at least
after your return was due, you will not working poor with half-time for any one semester during
get a dime. Let’s say your child is born the year. This is easy, since there is a
in December 2016 and you do not children extra refunds. check box on the tax form that the col-
have the SS number. You file your lege gives out. Actually, it is not so sim-
return without a number for the baby. Pretty unclear. I have always main- ple. What about mini-mesters and
You finally get the number in May. You tained that they are allowable. Here is summer college? Can those credits be
could lose your entire credit! If the SS why: One can deduct all tuition and added to spring or fall to make you
number is held up, you had better fees required to attend college. This half-time, or are those stand-alone
make sure you have filed a valid exten- word fees seems to certainly include semesters?
sion for your income tax! And, as I Israeli yeshiva tuition. This is because
have written in the past, make sure the American college requires you to You also need to be pursuing a
that you put the baby’s name on the be attending one of their partner degree. This is an unclear rule, if you
birth certificate in the hospital so you yeshivas in Israel. Therefore, the money ask me. What does that requirement
get an SS number right away and do paid to Israel is like a fee paid to the demand of you? Is it a question of what
not get caught up in delays. American college overseeing this. you are thinking when you enroll? No
Some accountants, however, might say one knows; even the official IRS form,
Claiming College Tax Credits that these yeshiva payments do qualify. called a 1098-T, which is filled out by
Here is an important issue that really Furthermore, room and board do not the college, does not have a check box
affects our community. If you pay col- count, and we need to figure out how for the pursuing a degree question.
lege tuition, you get some big tax sav- much of the yeshiva tuition is for However, be warned, because the rules
ings. Here is the new “but.” You have to tuition and how much is for room and do read that you must be “pursuing a
receive a 1098-t tax form to claim it. board. degree, certificate, or any other recog-
This sounds simple since this form is nized credential.”
sent to every student automatically Let’s review: You need a 1098-t to
from the college. So why would you not claim this credit, but your deduction Some further confusion: There are
receive it? Well, many of our kids are in doesn’t have to equal the dollar two separate four-year rules here. The
dual programs. They might be enrolled amounts printed on this 1098-t. The simple rule is that you can claim the
in a college in the U.S. but be attend- 1099-t can be confusing for many rea- credit for a maximum of four tax (cal-
ing yeshivas in Israel, which are over- sons: first, because, for various reasons, endar) years. The second rule is that
seas programs of these American the numbers will often not match what you can claim it for the first four years
schools. you’ve paid. The reason for this is of college. This is not clear. What if you
beyond the scope of this article. This went to college 20 years ago and are
If you are in yeshiva and not one issue regarding yeshiva tuition now going back to a college that does
enrolled in an American college, you means that you absolutely need a frum not accept the credits you earned at
certainly cannot claim this tax credit. accountant who is used to dealing with that time? Do your four years start
The law is clear you need to be this issue. Yes, that is self-serving but is over? It seems they do. What about
enrolled in an eligible educational an honest statement. high schoolers taking college courses?
institution. However, if you are enrolled What if it takes you seven years to get
in the yeshiva program of an American More About College a four-year degree? Could you claim it
college, you need to get that tax form If any of your dependents is in college, for the last four years if you did not
from the college. Now it gets compli- you can get a valuable tax credit. The claim it for the first three years? I
cated. Yes, you are enrolled in an assume that this four-year rule
is another way of saying “enough
credits to get a bachelor’s degree.”
100 u www.wherewhatwhen.com u
pre-paying state income taxes. checks are written to yeshiva. Are American Opportunity tax credit.
those deemed to have been paid to the Planning can be critical here, as you
Earned Income Credit American college? Do they need to be? are juggling various expenses and vari-
The earned income credit is the magi- ous years. It is very easy to blow a few
cal government handout program, in The earned income credit thousand dollars. There is a lot to say
which the government gives the work- here, but basically, the credit is limited
ing poor with children extra refunds. is the magical to four years. For the first four years,
How much? It can be over $6,000 if you can get a credit worth $2,500 if
you have three children. And that is government handout you spend at least $4,000 on tuition,
just the federal government. The state fees, and supplies. Spending over
of Maryland will add to that upwards of program, in which the $4,000 is not helpful, so watch your
$1,500. Your children must have a expenses and the timing.
social security number. But there is a government gives the
new law: If that number was issued You need to be enrolled at least
after your return was due, you will not working poor with half-time for any one semester during
get a dime. Let’s say your child is born the year. This is easy, since there is a
in December 2016 and you do not children extra refunds. check box on the tax form that the col-
have the SS number. You file your lege gives out. Actually, it is not so sim-
return without a number for the baby. Pretty unclear. I have always main- ple. What about mini-mesters and
You finally get the number in May. You tained that they are allowable. Here is summer college? Can those credits be
could lose your entire credit! If the SS why: One can deduct all tuition and added to spring or fall to make you
number is held up, you had better fees required to attend college. This half-time, or are those stand-alone
make sure you have filed a valid exten- word fees seems to certainly include semesters?
sion for your income tax! And, as I Israeli yeshiva tuition. This is because
have written in the past, make sure the American college requires you to You also need to be pursuing a
that you put the baby’s name on the be attending one of their partner degree. This is an unclear rule, if you
birth certificate in the hospital so you yeshivas in Israel. Therefore, the money ask me. What does that requirement
get an SS number right away and do paid to Israel is like a fee paid to the demand of you? Is it a question of what
not get caught up in delays. American college overseeing this. you are thinking when you enroll? No
Some accountants, however, might say one knows; even the official IRS form,
Claiming College Tax Credits that these yeshiva payments do qualify. called a 1098-T, which is filled out by
Here is an important issue that really Furthermore, room and board do not the college, does not have a check box
affects our community. If you pay col- count, and we need to figure out how for the pursuing a degree question.
lege tuition, you get some big tax sav- much of the yeshiva tuition is for However, be warned, because the rules
ings. Here is the new “but.” You have to tuition and how much is for room and do read that you must be “pursuing a
receive a 1098-t tax form to claim it. board. degree, certificate, or any other recog-
This sounds simple since this form is nized credential.”
sent to every student automatically Let’s review: You need a 1098-t to
from the college. So why would you not claim this credit, but your deduction Some further confusion: There are
receive it? Well, many of our kids are in doesn’t have to equal the dollar two separate four-year rules here. The
dual programs. They might be enrolled amounts printed on this 1098-t. The simple rule is that you can claim the
in a college in the U.S. but be attend- 1099-t can be confusing for many rea- credit for a maximum of four tax (cal-
ing yeshivas in Israel, which are over- sons: first, because, for various reasons, endar) years. The second rule is that
seas programs of these American the numbers will often not match what you can claim it for the first four years
schools. you’ve paid. The reason for this is of college. This is not clear. What if you
beyond the scope of this article. This went to college 20 years ago and are
If you are in yeshiva and not one issue regarding yeshiva tuition now going back to a college that does
enrolled in an American college, you means that you absolutely need a frum not accept the credits you earned at
certainly cannot claim this tax credit. accountant who is used to dealing with that time? Do your four years start
The law is clear you need to be this issue. Yes, that is self-serving but is over? It seems they do. What about
enrolled in an eligible educational an honest statement. high schoolers taking college courses?
institution. However, if you are enrolled What if it takes you seven years to get
in the yeshiva program of an American More About College a four-year degree? Could you claim it
college, you need to get that tax form If any of your dependents is in college, for the last four years if you did not
from the college. Now it gets compli- you can get a valuable tax credit. The claim it for the first three years? I
cated. Yes, you are enrolled in an assume that this four-year rule
is another way of saying “enough
credits to get a bachelor’s degree.”
100 u www.wherewhatwhen.com u
