What Expenses Do Not Qualify?

Qualified tuition and related expenses do not include the cost of:

• Insurance,
• Medical expenses (including student health fees),
• Room and board,
• Transportation, or
• Similar personal, living, or family expenses.

This is true even if the fee must be paid to the institution as a condition of enrollment or attendance.

Qualified tuition and related expenses generally do not include expenses that relate to any course of instruction or other education that involves sports, games or hobbies, or any noncredit course. However, if the course of instruction or other education is part of the student's degree program or, in the case of the lifetime learning credit, is taken by the student to acquire or improve job skills, these expenses can qualify.

No double benefit allowed. You cannot:

• Deduct higher education expenses on your income tax return and also claim a lifetime learning credit based on those same expenses,
• Claim a Hope credit and a lifetime learning credit based on the same qualified education expenses, or
• Claim a credit based on expenses paid with tax-free scholarship, grant, or employer-provided educational assistance. See Adjustments to Qualified Expenses, earlier.

Refunds. Qualified tuition and related expenses do not include expenses for which you receive a refund. If you paid expenses in 2000, and you received a refund of those expenses in 2000 or 2001, but before you file your tax return for 2000, simply reduce the amount of the expenses paid by the amount of the refund received. If you receive the refund after you file your 2000 tax return, see When Must Credit Be Repaid, later.

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