Can I Claim a Tuition & Fees Credit on a California State Tax Return?

Educational expenses aren't deductible in California.

If you pay tuition and fees for yourself or a qualifying dependent, the Internal Revenue Service allows you to deduct a portion of these fees from your taxable income, but some states, including California, don't recognize this deduction. The IRS also allows qualifying individuals to claim tax credits for educational expenses, but, at the time of publication, no such credit is available in California.

California Tax Returns

To complete your state tax return in California, you must use information found on your federal tax return. If there are differences between your allowable California deductions and your federal deductions, you must file Schedule CA to adjust your taxable income. You must also file a Schedule CA if the reportable income for your California return differs from the income you reported on your federal return.

Implications for Tuition and Fees Deduction

The federal tuition and fees deduction allows qualifying taxpayers to reduce their taxable income by up to $4,000 for qualifying educational costs they paid during the year. If you claimed a tuition and fees deduction on your federal tax return, you must use Schedule CA when you file your California tax return to record the amount you deducted in your taxable income.

Completing Schedule CA

To adjust your taxable income using Schedule CA, you must include the amount of tuition and fees that you deducted from your federally taxable income in column A and B on line 34 of the form. You will subtract the amount on line 34 B from your California itemized deductions before you calculate the income tax you owe to the state.

Considerations

If your California itemized deductions don't exceed your standard deduction, you can take your standard deduction even if you itemized on your federal return. In this case, California's exclusion of the tuition and fees deduction won't affect your owed tax. At the time of publication, there are no other tax breaks or credits available for educational expenses in California. The Lifetime Learning and American Opportunity credits don't apply.

references