The state budget bill created a new state income tax deduction for elementary and secondary school tuition expenses paid on or after January 1, 2014. When filing in 2015, taxpayers may claim their paid private and religious school tuition expenses of up to $4,000 for each dependent child in kindergarten through eighth grade, and up to $10,000 for each dependent child in grades nine through twelve. The Wisconsin Catholic Conference supported the tax deduction, recognizing it as one of the many ways the state can affirm the vital role parents play in shepherding their children’s education.
Any person who pays tuition expenses at a private school and taxes in Wisconsin is eligible. However, the deduction is not a tax credit. The amount that any one family or individual will save is dependent upon income, filing status, and most importantly, the resulting tax liability. The average eligible family will see a tax cut of around $240 per primary school child and around $600 per high school student. Those with multiple students attending high school could see the biggest savings. For example, a family with a household income of $90,000 that spends $7,500 per child for their two high school students in 2014 will see their taxes reduced from $5,643 to $4,703, for a savings of $940.
A mother who makes $46,000 and sends her two children to a Catholic elementary school with tuition of $2,000 per student will also save. Her taxes before the deduction are $2,884. After the $4,000 deduction, her taxes fall to $2,633, saving her $251.
To claim the deduction, families should make certain that their child’s school meets the basic definition of a private school. Taxpayers can only claim the expenses they have paid; the deduction cannot be used for scholarships or financial aid. Also, families should save payment records (receipts, etc.) as supporting documentation for their tax records. The Wisconsin Department of Revenue (DOR) will provide further information on how to claim the deduction in their 2014 publications.