Homeschooling is a blessing to our family. The flexibility of schedule, customization of learning and the increased time we spend with each kid are well worth the work, time and cost. Although we pay taxes to the local school district, we have chosen to school on our own. Thus, we pay a pretty penny out of pocket for things our kids would receive for “free” at public schools including curriculum, experiences and learning software.

People often inquire as to whether all these expenses are tax deductible. While federal tax returns don’t have a homeschool tax deduction, many states do.  

Follow along to find out if your state has a homeschool tax deduction.

Tax Deduction Vs. Tax Credit

Although many people use the terms tax deduction and tax credit interchangeably. Let’s distinguish between the two.

A tax deduction uses a specific expense to reduce your taxable income. A homeschool tax deduction subtracts qualifying expenses, in this case homeschool educational material, to lower how much money the government considers as income for tax purposes.

A tax credit uses an expense to reduce your actual tax. This is more beneficial, as reducing your income by $500 may only be a $25 savings (If you’re state has an 5% income tax), while a $500 tax credit reduces your tax by the full $500.

Since education is primarily driven by state governments, it’s unlikely federal homeschool tax deductions or credits are in our future. However, it’s important that you are aware of the tax benefits you have as a homeschool parent. Remember to keep track of the receipts for homeschool expenses to properly document your eligibility for these tax benefits.

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Homeschool Tax Deductions or Credits by State

Illinois Homeschool Tax Credit

Illinois offers a 25% credit on all homeschool expenses after the first $250, up to a maximum credit of $750. You can max this tax credit out if you spend $3250 on homeschool in a year. While this credit’s availability stretches to any parent of a school-aged child, homeschool parents are the most likely to max the credit out.

What Expenses Qualify?

Tuition, workbooks, teacher grade books, book or curriculum rental fees, lab fees and associated shipping charges and sales tax.

What Expenses Do Not Qualify?

If the item isn’t “used up”, the state of Illinois won’t let you use it for their tax credit. For instance, a book rental fee qualifies, but a textbook does not. Things that don’t qualify include: non-consumable textbooks, flash-cards, wall maps, instruments or computers. Mileage, travel expenses, or tutoring or enrichment classes that don’t satisfy state education requirements also do not qualify.

Minnesota Homeschool Tax Deduction and Credit

Minnesota offers both a tax deduction available to anyone and a tax credit subject to income limitations.

The Minnesota Homeschool max credit is determined by your adjusted gross income. The lower your income the more you may claim as a credit. This is a refundable credit, meaning if your credit exceeds your tax bill, the Minnesota Tax department will remit you the difference in the form of a refund check.

The Minnesota homeschool tax deduction allows you to subtract (or deduct) up to $1,625 per child attending (or homeschooled) in grades K-6 and $2500 for children 7-12. You may utilize the tax credit or tax deduction but not both. These tax benefits extend beyond homeschool. Parents who educate their children through public or private school may still take advantage. Because homeschoolers likely have the most expenditures, they are more likely to take advantage of these benefits.

What Expenses Qualify?

Almost any truly educational expense qualifies for Minnesota’s homeschool tax deduction, including: music lessons (by a qualified instructor), driver’s ed courses, software, tuition and instrument purchase or rental.

The tax credit is slightly less generous, omitting tuition fees.

What Expenses Do Not Qualify?

Transportation costs, travel costs, non-educational software and the cost of sport camps, athletic fees or academic trips are not eligible for the tax credit or deduction.

Ohio Homeschool Tax Credit

This is Ohio’s first year with a homeschool tax deduction or credit. Ohio now offers a tax credit up to $250 per filer for educational expenses of at least one school-aged child. Unlike many of the other above credits, this credit is only available for students “excused from compulsory attendance” (i.e. Homeschoolers).

What Expenses Qualify?

Ohio’s homeschool tax credit is fairly liberal with what it considers educational material. Books, “supplementary materials”, supplies, computer software, applications or subscriptions all qualify for the tax credit.

What Expenses Do Not Qualify?

Computer and other electronic devices do not qualify for the credit. Because this credit is for the purpose of home instruction it does not include fees for tutoring or supplemental class fees including a co-op.

Indiana Private or Homeschool Tax Deduction

Indiana’s educational tax deduction is available to those sending their children to private, parochial or homeschool, but not public school. Taxpayers may deduct up to $1,000 from their income for tax purposes per qualifying child for educational expenses paid on their behalf.

What Expenses Qualify?

Because this tax deduction is available to private school or homeschooled students, tuition and tutoring do qualify for this tax deduction. Textbooks, software, tutoring fees or supplies also count.

What Expenses Do Not Qualify?

While Indiana doesn’t specifically list non-eligible items for their tax deduction. Computers and electronics don’t seem to qualify for any homeschool tax deduction or credit. When in doubt, keep the receipt and talk to your tax professional come tax time.        

Louisiana Homeschool Tax Deduction

Louisiana offers a homeschool tax deduction of 50% the cost of home education materials up to a limit of $5,000 deduction per qualifying child (up to $10,000 of expenses). The state offers additional tax deductions for private school tuition and public school educational costs as well.

What Expenses Qualify? 

The state specifically mentions curriculum and textbooks as qualifying expenses. Additional expenses like supplies, and supplemental material, while not specifically specified may qualify. Talk to your tax professional if you’re not sure.

What Expenses Do Not Qualify?

Louisiana’s homeschool tax deduction seems limited in scope. If the item is not directly related to education, you should likely forego deducting it from your returns. However, a tax professional in the state will be able to better direct you.

 IllinoisMinnesotaOhioIndianaLouisiana
Homeschool Tax DeductionNo  $1625 K-6
$2500 7-12
No$1,000 per childUp to $5,000 per child
Homeschool Tax CreditUp to $750 per familyYes, subject to income limits$250 per familyNoNo
Homeschool Tax Deductions and Credits by State

Alaska Homeschool Allotment

Because Alaska does not have an individual income tax, it doesn’t have a homeschool tax deduction or credit. What it does have is a homeschool allotment. Alaska is so sparsely populated that public education proves difficult. Alaska encourages homeschooling by setting aside a fund for each homeschool child for the purchase of books and educational material. The fund varies based on the program and age of the kid, but on average each child receives around $2,000.

Debrief

Homeschooling is a huge investment for a family. The cost of curriculum, learning software and lab kits easily stack up, especially if you have a large family. While the financial cost pales in comparison to the investment of energy and time, the ability to receive even a little of the financial investment back is a benefit you won’t want to pass up.

Tax law is constantly changing. Check the updated law and confirm with a tax advisor before claiming one of these tax deductions. As long as you keep good records, these homeschool tax deductions can take bite out of your tax bill.