Minnesotans’ Back-to-School Shopping Eligible for State Tax Benefits

(KNSI) – Minnesota families can get some money back from their back-to-school expenses when they file their 2021 taxes early next year, and a local tax expert says families should hang on to their school shopping receipts now.

The Minnesota Department of Revenue says parents and caregivers can apply for two tax benefits when they file their state taxes: the K-12 Education Subtraction and the K-12 Education Credit.

“The subtraction — that basically means that whatever dollars you’re spending for qualified school expenses and qualified activities, that amount gets subtracted from your taxable income on your state return,” says Ashley Kerzman, business manager for Landwehr Tax & Accounting. “A credit means you could get a refundable credit for qualified school expenses, but you have to be under a certain income limit to qualify for a credit.”

The revenue department says families with one or two children in grades K-12 that have a household income of less than $37,500 qualify for the K-12 Education Credit. For families with three or more eligible children, the limit is $2,000 more per K-12 child after two. There is no income limit for the subtraction.

“As you’re doing your back-to-school shopping, you would want to make sure that you’re keeping track of your receipts for qualified school expenses,” Kerzman said. “What that basically means is anything that’s required to go to school, so your pens, pencils, notebooks, even gym shoes — make sure you keep your receipts, keep track of the amounts that you’re spending and include that with your tax documents for when you do file your 2021 tax return.”

While pens, pencils and notebooks are common school expenses that would qualify under the benefits, Kerzman says other purchases and payments like driver’s education courses, private school tuition and band/orchestra instrument rentals can also be counted.

“Your backpacks aren’t included,” Kerzman said. “Some classrooms have you purchase Ziploc baggies or tissues; those types of things aren’t included.”

In 2020, the state revenue department says nearly 190,000 families earned the K-12 Education Subtraction, and more than 33,000 families received the K-12 Education Credit; those families saved, on average, $250.

“If you’re unsure of what could qualify, what may not qualify, just keep a list of it anyways,” Kerzman said. “Your tax preparer is going to be able to determine what we can deduct on your taxes and what not to deduct.”

Kerzman also recommended going to the Minnesota Department of Revenue’s webpage on qualifying expenses for the credit and subtraction.

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