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Published August 23, 2010, 12:00 AM

Back to school purchases? Save those receipts for a tax break

More parents of school-age children could be getting tax breaks for educational expenses if they just saved their receipts, says Lisa Waldrup, a spokeswoman for the Minnesota Department of Revenue.

By: Candace Renalls, Duluth News Tribune

  • School shopping
    • image
    Jenny Skull and her daughter Jenna, 11, of Duluth check a list to see whether they’ve gotten all the school supplies Jenna will need as they shop at the Duluth Target on Friday afternoon. Jenna will be a sixth-grader at Morgan Park Middle School this year. (Clint Austin / caustin@duluthnews.com)

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More parents of school-age children could be getting tax breaks for educational expenses if they just saved their receipts, says Lisa Waldrup, a spokeswoman for the Minnesota Department of Revenue.

“People don’t realize how many expenses apply,” she said.

Boy, that’s an understatement.

A check with parents shopping for school supplies for their K-12 children at the Duluth Target store Sunday afternoon found that none of them saved their receipts, nor were they even aware of the tax breaks they could be getting.

Besides tuition, they can claim education-related costs for notebooks, pens, textbooks, musical instruments, computer hardware and software, mandatory gym clothes, tutoring and academic summer camps. And it all applies to home-schooled children as well.

John Bishop of Sandstone was filling a cart with school supplies for his three children, ages 7, 10 and 12, including plenty of pencils, markers and notebooks.

It was their annual shopping trip that would also include shopping for new school clothes.

He doesn’t keep receipts, never has.

“I didn’t know about it,” he said, adding, “but it sure would help.

Renee Shuck’s two daughters are in college, but she never saved her receipts for their school supplies, either. “I definitely would have saved them if I had known,” said Shuck of Aurora.

Discovering that musical instruments — both rental or purchased — and computer costs could be included caught her attention. When her girls were in school, she bought them two instruments, including a $700 trombone and two computers for their school work.

She lamented the missed opportunity.

Waldrup made the media rounds in the Northland last week to get the word out. “We’re reminding parents to hang onto their receipts for supplies,” Waldrup said.

Minnesota has two programs to help families with children in kindergarten through 12th grades:

  • With the Minnesota K-12 education tax credit, low-income parents can claim up to 75 percent of qualifying expenses, reducing the amount of taxes they owe. The credit has income limits. For a family of four, federally adjusted gross income must not exceed $41,500. The average credit in 2008 was $264, Waldrup says.

  • The K-12 subtraction — added to line 29 of the state’s M1 income tax form — has no income restrictions. It reduces the amount of taxable income by up to $1,625 for each child in kindergarten through sixth grades and up to $2,500 for each child in seventh through 12th grades.

    In 2008, 227,000 Minnesota households used the subtraction and 54,000 took advantage of the education credit, Waldrup says.

    Cheryl Urie of Esko wasn’t one of them.

    “I didn’t even realize there could be a tax reduction,” she said as she shopped for supplies for her 7-year-old son. “I was aware of tuition (credits), but I didn’t think regular day-to-day school supplies could be used.”

    From now on, she says she’ll save her receipts.

    To learn more

    For more information on Minnesota education tax credits and subtractions, visit the Minnesota Department of Revenue’s website at www.taxes.state.mn.us or call (800) 652-9094.

    For more information on federal education credits, see IRS Publication 970, Tax Benefits for Education, at www.IRS.gov or call (800) 829-3676 to order it.

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