You cannot claim the tuition and fees deduction if you are married filing separately. Also, if you were a nonresident alien at any time during the year, and did not elect to be treated as a resident alien for tax purposes, in the case that you were married to a U.S. citizen or resident alien, you cannot claim the tuition and fees deduction.
You cannot claim the deduction if someone else can claim you as a dependent, even if that person does not actually claim the exemption. This goes back to the rules described above on who can actually claim the deduction when the student is a dependent.
There are different tax benefits available for education expenses, and if, for example you or someone else claims a Hope or lifetime learning credit, you cannot claim the tuition and fees deduction for those same expenses. You could claim different tax benefits for different students, if applicable.
No Deduction for Expenses Paid with Tax-Free Funds
Also, you cannot claim the tuition and fees deduction if you paid the education expenses with tax-free funds. You will have to reduce the amount of qualified education expenses you can claim as a deduction by the amount of any tax-free funds you receive, including:
Nontaxable part of a distribution from a Coverdell Education Savings Account (ESA),
Nontaxable part of a distribution from a qualified tuition program,
Tax-free interest from U.S. Savings Bonds (Form 8815),
The tax-free part of scholarships and fellowships,
Pell grants,
Employer-provided education assistance,
Veteran’s educational assistance, or
Any other tax-free educational assistance.
You may still be able to claim a tuition and fees deduction if the amount of qualified expenses you paid exceeds the amount of the tax-free benefits you received.
You do not have to reduce your qualified expenses by amounts that are paid with funds the student receives from wages, loans, gifts or inheritance, or funds from personal savings.
Scholarships and Fellowships
If part of a scholarship or fellowship is for the performance of services, that part may be taxable and would not have to be excluded for purposes of the tuition and fees deduction.
If a scholarship or fellowship is included in the student’s taxable income because:
it is restricted to paying expenses, such as room and board, that are not considered qualifying education expenses, or
the scholarship or fellowship is not restricted, but it is used to pay expenses that are not considered qualifying education expenses,
then that amount would not have to be subtracted from the amount that qualifies for the tuition and fees deduction.