Tutoring Tax Deductions

I am not a tax professional!  Use your best judgement and research skills to figure out what makes the most sense in your family's situation.

Passed in July 2025, the Big Beautiful Bill explicitly states that private tutoring is considered a qualifying educational expense for K-12 students for 529 Education Savings Plan withdrawals.  This only applies to Federal taxes on the withdrawals.

About the 529 Savings Plan (I live in MN, so I called out MN state exceptions and rules, but please consult your tax professional about your situation):

• Contributions to the plan are not federally deducted, but MN offers an income deduction when you contribute (1500 single 3000 married joint)

• All growth is tax-free!

• Withdrawals are tax-free for qualified expenses for Federal* taxes for Educational expenses - traditionally only college expenses, but expanded to K-12 with a 20,000 (raised in 2026 from 10,000 to 20,000) annual withdrawal cap.

*MN only considers college expenses to be qualified, and will recapture their portion of taxes for K-12 deductions (they give a different deduction for K-12 Education expenses).  You must add back any investment earnings from the distribution to your MN taxable income, as they do not consider K-12 expenses to be a qualified expense.

Common things High Schoolers need that qualify for 529 federal* tax-free K-12 educational expense withdrawals:

• Standardized Test Fees (ACT/SAT/AP tests)

• Curriculum Materials (the book of practice tests for the ACT/SAT/PSAT or practice tests for an AP class count)

• Educational Therapies

• Tutoring Services (must meet eligibility)
  Tutor must be qualified: Betsy has a MN Teaching License

MN K-12 Education Subtraction and Credit:

• 2,500 Deduction from taxes 

• Income limit dependent tax credit (can't claim both but this one is better if it applies)

• Starting in 2022, no income limit to claim the 2500 subtraction

• Common Qualifying Expenses:

  • • Driver's Ed Classes

    • Computer/Software Expenses (up to $200/year)

    • Expenses for the Normal School Day

      • • Textbooks (and test prep books)

        • Field trip fees

        • Homeschooling material expenses

        • Private school tuition

    • After-school Educational Enrichment Programs, Tutoring, and Summer Programs

      • • To qualify, the program must be academic in nature (reading, math, science, history, and fine arts - not sports, athletics, or religious instruction)

        • Taught by a qualified instructor

          • • MN Licenced Teacher is one of a few categories, so we're set here