Are tuition fees tax deductible?

Tuition fees in the tax return

Tuition fees can either be included as special expenses up to a maximum of € 6,000 or as business expenses or business expenses in the student's tax return.

Tuition for a child

Tuition fees that may be paid for a child can usually not be applied. A child is already considered to be considered for tax purposes if it includes child benefit or the child allowance in the tax return. Parents receive a training allowance for children who are over 18 years old and who are studying outside of their parents' home. This is intended to compensate for the child's increased need for tax purposes.

Special expenses or advertising expenses

For the classification of the tuition fees in the student's tax return, it is important whether it is a first or a second degree. In the case of the first degree, the costs can be recognized as special expenses. A second degree involves anticipated business expenses or business expenses.

First degree or second degree?

First degree: The first training after leaving school or a bachelor’s degree is considered a first degree. An exception is a degree / apprenticeship as part of an employment relationship (dual degree).

Second degree: An apprenticeship must already have been completed or a degree must have preceded it. You can find a complete list here.

Is it worth filing a tax return for students?

Filing a tax return can pay off for students doing a second degree. In the case of a second degree, the tuition fees and other expenses for attending the university can be set as anticipated business expenses. This means that these costs are collected first and determined as a loss. This loss can later be offset directly against this income when the student receives income from his studies. Submitting a tax return during a second degree can reduce the later tax liability after entering the world of work.

Submitting a tax return can also be worthwhile for students who are doing their first degree if they earn income that is higher than the basic tax-free allowance while studying. Then these students would have to pay taxes and would reduce the tax burden through the special expenses of the tuition fees. In contrast to students with a second degree, where the tuition fees represent business expenses, the special expenses deduction cannot be carried over to subsequent years and does not result in a loss. The deduction of tuition fees as special expenses only has an effect in the year of the tax return itself.

The decision whether expenses for a first degree are also recognized as income-related expenses is still pending at the Federal Constitutional Court (Az: 2 BvL 23/14 and 2 BvL 24/15). Therefore, these costs can also be recorded as training costs in the income-related expenses. If the decision turns out differently, nothing is lost for the time being. If the court decides in favor of the students, the costs will be recognized as income-related expenses.