Distribution of Education Tax Benefits by Income, 2013

Tax savings for students and parents who claimed education tax credits averaged about $1,460 in 2013.

Figure 31B: Distribution of Education Tax Credits and Savings from Tuition Deductions by Adjusted Gross Income (AGI), 2013

Notes & Sources 

NOTES: The total and average values of tax credits and deductions are best estimates based on data from the Internal Revenue Service. A portion of nonrefundable dollars claimed on nontaxable returns is excluded to account for credits and deductions that do not reduce tax liability. The value of tax deductions is estimated based on applicable marginal tax rates. Percentages may not sum to 100 because of rounding.

SOURCES: Internal Revenue Service, Statistics of Income 1998 to 2014, Tables 1.3, 1.4, 2, 3.3; calculations by the authors.

  • Education tax credits and deductions are “tax expenditures.” They reduce federal income tax liabilities and federal tax revenues, and have the same impact on the federal budget as direct expenditures.
  • In 2013, savings from the tuition tax deductions were only about 3% of the value of the education tax credits. The number of filers benefiting from the deduction was about 10% of the number benefiting from the credit.
  • In 2013, about one-quarter of the benefits of the education tax credits and deductions went to tax filers with incomes of $100,000 or higher. One-quarter went to those with incomes below $25,000.