Tuition and Textbook Tax Credit

Iowa’s tax credit provides universal eligibility for families with educational expenses for K–12 tuition, textbooks and other qualifying expenses for dependent students. Families with students attending accredited Iowa schools or being educated at home are eligible to claim the tax credit. _(Last updated July 15, 2024)_

Parents may receive a credit for out-of-pocket expenses related to certain qualifying expenses related to the education of their children. Qualifying expenses include: tuition for any K–12 that is accredited; textbooks and publications; required materials and supplies other than textbooks; required clothing that is not “street wear”; driver’s education, dues, fees, and admissions; materials for extracurriculars; music; shoes that are not “street shoes”; supplies for industrial arts, home economics or equivalent classes; travel to and from school or field trips during school hours; and uniforms. Excluded expenses include: yearbooks; textbook fines; class rings; purchase or rent-to-own musical instrument contracts; money spent on the education of religious tenets; optional expenses for personal projects for family benefits; and overnight travel. Expenses for tutoring or other services outside an accredited Iowa school do not qualify for the credit. Purchases made from Students First Educational Savings Account (ESA) funds are not eligible for the credit. _(Last updated July 15, 2024)_

Parents receive a tax credit worth 25% of their expenditures up to a maximum credit of $500 per dependent K–12 student. To get the maximum $500 per-dependent credit, parents must spend $2,000 in educational expenses for tuition, textbooks, and other qualifying expenses. The tax credit is also nonrefundable and, thus, cannot reduce an individual’s tax burden to less than zero. _(Last updated July 15, 2024)_

On March 17, 1992, the U.S. District Court for the Southern District of Iowa in _Luthens v. Bair_ held that Iowa’s newly enacted Tuition and Textbook Tax Credit program was constitutional. Citing a previous ruling of the U.S. Supreme Court, _Mueller v. Allen_ , 463 U.S. 388 (1983), upholding Minnesota’s Education Tax Deduction, the court ruled that Iowa’s tax credit for private school educational expenses does not violate the Establishment Clause of the First Amendment to the United States Constitution. _Luthens v. Bair_, 788 F. Supp. 1032 (S.D. Iowa 1992). _(Last updated July 15, 2024)_