Here’s an encouraging sign for teachers working to earn their master’s degrees.
The State of Minnesota is encouraging by erasing as much as $2,500 from income taxes for their advanced studies. Licensed teachers in the state who completed a master of arts or master of science degree last year are eligible.
The state offers a one-time tax credit for each master’s degree. The write-off covers tuition, required fees and books. Save your transcripts, receipts and other proofs, the Minnesota Department of Revenue suggests.
The type of program is important. The teacher must have studied in a specific “core content area”, such as history or mathematics or fine arts. The subject must be directly related to his/her teaching license. However, the art of teaching itself (e.g. a master’s in education) does not qualify, the agency notes.
Teachers who began their master’s work after June 30, 2017, are eligible for the “Credit For Attaining Master’s Degree in Teacher’s Licensure Field.” Fill out Schedule M1CMD in your 2020 state tax return. It comes with instructions that answer many questions.
Teachers are able to claim the tax credit even if they received scholarships or other reimbursements for some expenses. But they’ll have to report that financial aid on the tax form.
Tax credits are particularly powerful benefits because they lower taxes themselves – not just income that is taxed.
For more information and guidance, contact Eric Buechler of EricJohn Ltd. He is an enrolled agent recognized by the Internal Revenue Service.