Tax Law Changes

Qualified Higher Education Expenses

Expands definition of "qualified higher education expenses" to include additional categories of allowed expenses for students enrolled in or attending elementary or secondary private, public or religious schools.

• Qualified expenses now include tuition, curriculum and curriculum materials, on-line educational materials, tutoring or educational classes outside of the home, including at a tutoring facility, fees for tests related to college or university admission, fees for dual enrollment in an institution of higher education and educational therapies.
• Increases the distribution limit for qualified higher education expenses to $20,000.

Education Credits (American Opportunity and Lifetime Learning Credits)

Beginning with tax year 2026, taxpayers claiming the American opportunity credit or lifetime learning credit on Form 8863 must provide a Social Security Number (SSN) for themselves and (if filing jointly) their spouse. If the credit is for someone other than the taxpayer or spouse, the taxpayer must provide an SSN for the student for whom education expenses are paid.

• The school's federal employer identification number (FEIN) must be shown on Form 8863, Education Credits, when the American opportunity credit is claimed.

Employer Payments for Student Loans

Permanent extension of $5,250 exclusion from income for employer-provided student loan payments, indexed annually for inflation for taxable years beginning after 2025.

Student Loans Discharged due to Death or Disability

Permanently extends exclusion from gross income for student and private education loans discharged on account of death or disability.