Financing Your Education
Tax Related Benefits
There are some tax benefits that may apply to veterans and service members. If you have additional questions about your specific situation, you may want to contact a tax professional.
- Federal Tax Information for Service Members: For federal tax purposes, the U.S. Armed Forces includes officers and enlisted personnel in all regular and reserve units controlled by the Secretaries of Defense, the Army, Navy and Air Force. The Coast Guard is also included, but not the U.S. Merchant Marine or the American Red Cross. However, these and other support personnel may qualify for certain tax deadline extensions because of their service in a combat zone.
- Tax Credit for Military Service in a Combat Zone: If you served in a combat zone or hazardous duty area anytime on or after September 11, 2001, you may be eligible for a Minnesota Department of Revenue tax credit of $59 for each month you served in calendar year 2008 and $120 for each month you served in calendar year 2009.
- Military Service and Minnesota Tax Information: The 2008 omnibus tax bill (Laws 2008, ch. 366) provided for a new income tax credit for past military service. The credit equals $750 for qualifying individuals. It is nonrefundable and is subject to an income limitation. The credit takes effect beginning in tax year 2009 and will first be claimed on tax year 2009 returns filed in 2010.
- American Opportunity Credit: Find out more about how you may be able to earn a tax credit of up to $2,500 for out-of-pocket expenses related to your education including textbooks and other course materials paid during the taxable year. For an overview at a glance, view the Textbook Tax Credit Flyer
- Hope Credit: The Hope credit applies towards the first two years of post-secondary education tuition and fees. The maximum yearly credit that you may receive is $1800. The new American Opportunity Credit has replaced the Hope Credit for most taxpayers. However, a larger Hope credit ($3,600 maximum) is available for students meeting the special rules for the Midwestern disaster areas.
- Lifetime Learning Tax Credit: You can apply for the Lifetime Learning credit each year you are enrolled in post-secondary education. You can use the Lifetime Learning credit for a single course that is used to acquire or improve job skills. The maximum yearly credit that you may receive is $2000.
- Tuition and Fees Deduction: In some situations, fees and tuition may be deducted.
- Tax Filing: You may be able to file your taxes for free through the IRS website if your income is less than $50,000.
ONLINE FINANCE RESOURCES
- Online Goal Setting Workshop
- Interactive Benefits Flowchart
- Military Scholarships
- MN Veterans Educational Benefits Guide
- Minnesota Military Appreciation Fund
- MN Department of Veterans Affairs Resources
- MN Tax Credit for Military Service in a Combat Zone
- MN Tax Information for Military Service
- Federal Tax Information for Service Members