as a quick check to see if your education qualifies (see next
Education Required by Employer or by Law
Once you have met the minimum educational requirements for your job, your employer or the law may require you to get more education. This
additional education is qualifying education if all three of the following requirements are met.
- It is required for you to keep your present salary, status, or job,
- The requirement serves a business purpose of your employer, and
- The education is not part of a program that will qualify you for a new trade or business.
When you get more education than your employer or the law requires, the additional education can be qualifying education only if it maintains or
improves skills required in your present work. See Education To Maintain or Improve Skills.
You are a teacher who has satisfied the minimum requirements for teaching. Your employer requires you to take an additional college course each
year to keep your teaching job. If the courses will not qualify you for a new trade or business, they are qualifying education even if you eventually
receive a master's degree and an increase in salary because of this extra education.
Education To Maintain or Improve Skills
If your education is not required by your employer or the law, it can be qualifying work-related education only if it maintains or improves skills
needed in your present work. This could include refresher courses, courses on current developments, and academic or vocational courses.
You repair televisions, radios, and stereo systems for XYZ Store. To keep up with the latest changes, you take special courses in radio and stereo
service. These courses maintain and improve skills required in your work.
Maintaining skills vs. qualifying for new job.
Education to maintain or improve skills needed in your present work is not qualifying education if it will also qualify you for a new trade or
If you stop working for a year or less in order to get education to maintain or improve skills needed in your present work and then return to the
same general type of work, your absence is considered temporary. Education that you get during a temporary absence is qualifying education if it
maintains or improves skills needed in your present work.
You quit your biology research job to become a full-time biology graduate student for one year. If you return to work in biology research after
completing the courses, the education is related to your present work even if you do not go back to work with the same employer.
If you stop work for more than a year, your absence from your job is considered indefinite. Education during an indefinite absence, even if it
maintains or improves skills needed in the work from which you are absent, is considered to qualify you for a new trade or business. Therefore, it is
not qualifying education.
Education To Meet Minimum Requirements
Education you need to meet the minimum educational requirements for your present trade or business is not qualifying work-related education. The
minimum educational requirements are determined by:
- Laws and regulations,
- Standards of your profession, trade, or business, and
- Your employer.
Once you have met the minimum educational requirements that were in effect when you were hired, you do not have to meet any new minimum educational
requirements. This means that if the minimum requirements change after you were hired, any education you need to meet the new requirements can be
You have not necessarily met the minimum educational requirements of your trade or business simply because you are already doing the work.
You are a full-time engineering student. Although you have not received your degree or certification, you work part time as an engineer for a firm
that will employ you as a full-time engineer after you finish college. Although your college engineering courses improve your skills in your present
job, they are also needed to meet the minimum job requirements for a full-time engineer. The education is not qualifying education.
You are an accountant and you have met the minimum educational requirements of your employer. Your employer later changes the minimum educational
requirements and requires you to take college courses to keep your job. These additional courses can be qualifying education because you have already
satisfied the minimum requirements that were in effect when you were hired.
Requirements for Teachers
States or school districts usually set the minimum educational requirements for teachers. The requirement is the college degree or the minimum
number of college hours usually required of a person hired for that position.
If there are no requirements, you will have met the minimum educational requirements when you become a faculty member. You generally will be
considered a faculty member when one or more of the following occurs.
- You have tenure.
- Your years of service count toward obtaining tenure.
- You have a vote in faculty decisions.
- Your school makes contributions for you to a retirement plan other than social security or a similar program.
The law in your state requires beginning secondary school teachers to have a bachelor's degree, including 10 professional education courses. In
addition, to keep the job, a teacher must complete a fifth year of training within 10 years from the date of hire. If the employing school certifies
to the state Department of Education that qualified teachers cannot be found, the school can hire persons with only 3 years of college. However, to
keep their jobs, these teachers must get a bachelor's degree and the required professional education courses within 3 years.
Under these facts, the bachelor's degree, whether or not it includes the 10 professional education courses, is considered the minimum educational
requirement for qualification as a teacher in your state.
If you have all the required education except the fifth year, you have met the minimum educational requirements. The fifth year of training is
qualifying education unless it is part of a program of study that will qualify you for a new trade or business.
Assume the same facts as in Example 1 except that you have a bachelor's degree and only six professional education courses. The
additional four education courses can be qualifying education. Although you do not have all the required courses, you have already met the minimum
Assume the same facts as in Example 1 except that you are hired with only 3 years of college. The courses you take that lead to a
bachelor's degree (including those in education) are not qualifying education. They are needed to meet the minimum educational requirements for
employment as a teacher.
You have a bachelor's degree and you work as a temporary instructor at a university. At the same time, you take graduate courses toward an advanced
degree. The rules of the university state that you can become a faculty member only if you get a graduate degree. Also, you can keep your job as an
instructor only as long as you show satisfactory progress toward getting this degree. You have not met the minimum educational requirements to qualify
you as a faculty member. The graduate courses are not qualifying education.
Certification in a new state.
Once you have met the minimum educational requirements for teachers for your state, you are considered to have met the minimum educational
requirements in all states. This is true even if you must get additional education to be certified in another state. Any additional education you need
is qualifying education. You have already met the minimum requirements for teaching. Teaching in another state is not a new trade or business.
You hold a permanent teaching certificate in State A and are employed as a teacher in that state for several years. You move to State B and are
promptly hired as a teacher. You are required, however, to complete certain prescribed courses to get a permanent teaching certificate in State B.
These additional courses are qualifying education because the teaching position in State B involves the same general kind of work for which you were
qualified in State A.
Education That Qualifies You for a New Trade or Business
Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work-related education. This is
true even if you do not plan to enter that trade or business.
If you are an employee, a change of duties that involves the same general kind of work is not a new trade or business.
You are an accountant. Your employer requires you to get a law degree at your own expense. You register at a law school for the regular curriculum
that leads to a law degree. Even if you do not intend to become a lawyer, the education is not qualifying because the law degree will qualify you for
a new trade or business.
You are a general practitioner of medicine. You take a 2-week course to review developments in several specialized fields of medicine. The course
does not qualify you for a new profession. It is qualifying education because it maintains or improves skills required in your present profession.
Bar or CPA Review Course
Review courses to prepare for the bar examination or the certified public accountant (CPA) examination are not qualifying education. They are part
of a program of study that can qualify you for a new profession.
Teaching and Related Duties
All teaching and related duties are considered the same general kind of work. A change in duties in any of the following ways is not considered a
change to a new business.
- Elementary school teacher to secondary school teacher.
- Teacher of one subject, such as biology, to teacher of another subject, such as art.
- Classroom teacher to guidance counselor.
- Classroom teacher to school administrator.
What Educational Expenses Are Deductible as Business Expenses?
If your education meets the requirements described earlier under Qualifying Work-Related Education, you can generally deduct your
work-related educational expenses as business expenses. If you are not self-employed, you can deduct business expenses only if you itemize your
deductions on Schedule A.
You cannot deduct expenses related to tax-exempt and excluded income.
The following educational expenses can be deducted.
- Tuition, books, supplies, lab fees, and similar items.
- Certain transportation and travel costs.
- Other educational expenses, such as costs of research and typing when writing a paper as part of an educational program.
Educational expenses do not include personal or capital expenses. For example, you cannot deduct the dollar value of vacation time or annual leave
you take to attend classes. This amount is a personal expense.
If you do not claim reimbursement that you are entitled to receive from your employer, you cannot deduct the expenses that apply to the
Your employer agrees to pay your educational expenses if you file a voucher showing your expenses. You do not file a voucher, and you do not get
reimbursed. Because you did not file a voucher, you cannot deduct the expenses on your tax return.
If your education qualifies, you can deduct local transportation costs of going directly from work to school. If you are regularly employed and go
to school on a temporary basis, you can also deduct the costs of returning from school to home.
If your attendance at school is realistically expected to last (and does in fact last) for 1 year or less, you go to school on a temporary basis
(unless there are facts and circumstances that would indicate otherwise).
If your attendance at school is realistically expected to last for more than 1 year or if there is no realistic expectation that the attendance
will last for 1 year or less, the attendance is not temporary, regardless of whether it actually lasts for more than 1 year.
If attendance at school initially is realistically expected to last for 1 year or less, but at some later date the attendance is realistically
expected to last more than 1 year, that attendance will be treated as temporary (unless there are facts and circumstances that would indicate
otherwise) until your expectation changes. It will not be treated as temporary after the date you determine it will last more than 1 year.
Attendance at school on a temporary basis was formerly defined as attendance on an irregular or short-term basis (generally a matter of days or
You can file an amended return on Form 1040X, Amended U.S. Individual Income Tax Return, for any year in which you used the former
definition of attendance on a temporary basis. However, you generally must file the amended return within 3 years from the time you filed the original
return or within 2 years from the time you paid the tax, whichever is later.
If you are regularly employed and go directly from home to school on a temporary basis, you can deduct the round-trip costs of transportation
between your home and school. This is true regardless of the location of the school, the distance traveled, or whether you attend school on nonwork
Transportation expenses include the actual costs of bus, subway, cab, or other fares, as well as the costs of using your car. Transportation
expenses do not include amounts spent for travel, meals, or lodging while you are away from home overnight.
You regularly work in Camden, New Jersey, and go directly from work to home. You also attend school every work night for 3 months to take a course
that improves your job skills. Since you are attending school on a temporary basis, you can deduct your daily round-trip transportation expenses in
going between home and school. This is true regardless of the distance traveled.
Assume the same facts as in Example 1 except that on certain nights you go directly from work to school and then home. You can deduct
your transportation expenses from your regular work site to school and then home.
Assume the same facts as in Example 1 except that you attend the school for 9 months on Saturdays, nonwork days. Since you are attending
school on a temporary basis, you can deduct your round-trip transportation expenses in going between home and school.
Assume the same facts as in Example 1 except that you attend classes twice a week for 15 months. Since your attendance in school is not
considered temporary, you cannot deduct your transportation expenses in going between home and school. If you go directly from work to school, you can
deduct the one-way transportation expenses of going from work to school. If you go from work to home to school and return home, your transportation
expenses cannot be more than if you had gone directly from work to school.
Using your car.
If you use your car (whether you own or lease it) for transportation to school, you can deduct your actual expenses or use the standard mileage
rate to figure the amount you can deduct. The standard mileage rate for 2002 is 36½ cents per mile. Whichever method you use, you can
also deduct parking fees and tolls. See Car Expenses in chapter 28 for information on deducting your actual expenses of using a car.