Tax Relief for Tuition Fees in respect of Third Level education IT 31

By Anne Reilly, founder and CEO of PaycheckPlus

As our young (and not so young) adults return to college, it’s worth thinking how to reclaim some of the fees incurred.  Indeed, if employees are undertaking an approved college course and paying fees, then they too may have something to gain by understanding the tax relief available.

Tax relief is available for Third Level Education tuition fees paid by an individual to an approved college in respect of an approved course.  Details of tax relief available for fees paid by an individual for certain training courses in Foreign Languages and Information Technology are available in Leaflet IT 31A.

Who can claim?

An individual can claim tax relief on fees paid for Third Level courses in respect of any person as long as he or she has paid the qualifying fees. Qualifying fees means tuition fees (including the Student Contribution, post 2011), but not examination fees, registration fees or administration fees, in respect of an approved course at an approved college.

Amount of Relief

Tax relief is available at the standard rate of income tax (20%) for qualifying tuition fees.

The maximum limit on such qualifying fees for the academic year 2015/2016  is €7,000, per individual per course.

The amount of relief available for the current year: Leaflet IT1 – Tax Credits, Reliefs and Rates.

Relief is not available in respect of:

• any part of the tuition fees that are or will be met directly or indirectly by grants, scholarships, by an employer or otherwise

• administration registration or examination fees.

For the tax year 2012 and subsequent tax years, the tax relief is allowable in respect of tuition fees including the Student Contribution. Most undergraduate students attending publicly funded third level courses do not have to pay tuition fees. However, most third level institutions charge an annual “Student Contribution” to cover the cost of student services. This Student Contribution is regarded as a qualifying tuition fee for tax relief purposes.

Tax relief is allowable per course, per student, per academic year. If you have paid tuition fees in respect of more than one individual attending college in an academic year, tax relief is due to you in respect of the fees paid for each person up to the maximum limit per course.

The amounts of qualifying tuition fees shown in the table below are disregarded in respect of each claim.

The above amounts are in respect of a claim, the subject of which may be one or more students. Therefore if you are claiming for more than one student you will get full relief, subject to the maximum limit, for the 2nd and subsequent student claimed.

The following examples outline how the relief works:

Claim in respect of one student in third level education

Public Colleges (Example 1)

Public Colleges (Example 2)

Public Colleges (Example 3)

Payment of Tuition Fees in instalments

Where fees are paid in instalments and any such amounts are paid in a tax year following the year in which the academic year of the approved course commenced, the relief for fees relating to that academic year may be granted either:

• in the tax year during which the academic year of the approved course commenced or
• in the tax year in which the instalment was paid.

However, relief will only be granted in respect of amounts actually paid, subject to the maximum relief available in that academic year.

How is the relief claimed?

The relief can be claimed during the tax year once the fees have been paid. A revised Tax Credit Certificate showing the relief due will then be issued to you.

Alternatively a claim can be made at the end of the tax year by submitting your P60 form. Your income tax liability for the year will be reviewed and Revenue will make any refund that may be due to you.

If you are self-employed this tax credit is claimed by completing the Tuition Fees section on your annual tax return.

To claim the relief, complete the relevant claim form and forward it to your Revenue office, the address of which can be found in the Contact Locator.

A separate claim form must be completed where you are claiming relief in respect of more than one student.

Details of any payment(s) received or to be received towards the fees must accompany the claim. You should retain all receipts for a period of 6 years as they may be requested for verification at a later date.

Note: You must notify your Revenue office within 21 days if you receive a refund or partial refund of tuition fees paid. Failure to do so may result in a penalty of €3,000.

Lists of Approved Colleges and Courses

Annual lists of approved Third Level colleges in the State and approved undergraduate and postgraduate courses in the State.

Time limit for Repayment Claims

A claim for repayment of tax must be made within four years after the end of the tax year to which the claim relates.