For most, driver's education and behind-the-wheel lessons are an integral part of becoming licensed. While the federal government doesn't offer deductions or credits to high school students participating in driver's education, a few states do. Adult learners who enroll in driver's education for work may write off the costs as an employee business expense, a tuition and fees deduction, or via the Lifetime Learning Credit.
State Deductions and Credits
No federal deduction or credit is available for teens participating in driver's education. However, there are a few state credits and deductions available. Both Iowa and Minnesota offer a deduction of all fees paid to driving instructors under their K-12 education deduction programs. Georgia also offers parents a credit once a child has successfully completed a driver's education program. Check with your state comptroller or board of revenue website to search for deductions and credits specific to your state
Employee Business Deduction
If your job requires you to obtain a driver's license and doesn't reimburse you for doing so, you can take the expense of driver's education as an itemized deduction. For the expense to qualify, the education must either maintain or improve your job skills, or be required to keep your current salary, job or status. Driver's education expenses include the cost of materials purchased, classroom lessons and behind-the-wheel lessons. Employees can deduct the expense on Form 2106, Employee Business Expenses. Employee business expenses are only deductible to the extent that they exceed 2 percent of your adjusted gross income.
Tuition and Fees Deduction
Instead of the claiming driver's education as an unreimbursed business expense, adult learners may want to claim the tuition and fees deduction. In order to claim this deduction, driver's education must be taken to acquire or improve job skills. The driver's education program must be administered through an accredited university or vocational program. However, the tuition and fees deduction isn't subject to the 2 percent floor like unreimbursed business expenses are. The maximum tuition and fees deduction is $4,000 per year.
Lifetime Learning Credit
An alternative to the tuition and fees deduction is the Lifetime Learning Credit. The basic requirements for the credit are the same as the tuition and fees deduction. While the tuition and fees deduction only reduces taxable income, the Lifetime Learning Credit offers a dollar-for-dollar reduction in tax liability up to $2,000. However, this credit is only available to taxpayers with a modified gross income of $64,000 or less.
- Minnesota Department of Revenue: Qualifying Expenses for the K-12 Education Credit and Subtraction
- CSG Midwest: Which States in the Midwest Offer Tax Credits for K-12 Education?
- TaxSlayer: Georgia Driver Education Credit
- IRS.gov: Topic 513 -- Educational Expenses
- Forbes.com: Ten Rules For Deducting Career Education