Back-to-School Season and the Tax Benefits Families Often Miss

August is just around the corner, which means school supply lists, registration fees, and the first conversations about college costs. It also means an opportunity to make sure you're capturing every tax benefit available to families with children and students.

Here's a practical guide to the education-related tax benefits worth knowing about for 2026.

The Child and Dependent Care Credit

If you paid for summer camp, day care, or other qualifying child care expenses while you and your spouse worked or looked for work, you may be eligible for the Child and Dependent Care Credit. For 2026, qualifying expenses are capped at $3,000 for one child and $6,000 for two or more.

Fun fact: The Child and Dependent Care Credit has been available since the Tax Reform Act of 1976, 50 years ago.

529 Plans: The Back-to-School Reminder

July is a good time to remind families: 529 plan contributions are not deductible on federal returns. If you have children heading toward college (or even K-12 private school), contributions made in July still grow tax-free for qualified educational expenses.

The American Opportunity Tax Credit (AOTC)

For families with students in the first four years of higher education, the AOTC provides a credit of up to $2,500 per student per year, with up to $1,000 of that being refundable. Income phaseouts apply (beginning at $80,000 AGI for single filers, $160,000 for married filing jointly).

The Lifetime Learning Credit

For students beyond their first four years of college, or adults taking courses for job-related skills, the Lifetime Learning Credit provides up to $2,000 per tax return (not per student). There's no limit on the number of years it can be claimed.

Student Loan Interest Deduction

If you're paying student loans, up to $2,500 of student loan interest may be deductible as an adjustment to income (subject to income phase-outs). This applies whether you itemize or take the standard deduction.

Planning for Back-to-School

Before the school year begins, it's worth having a brief conversation with your tax professional to confirm you're set up to capture the credits and deductions relevant to your family. Changes to income, number of dependents, or college enrollment status in 2026 can all affect your eligibility.

Contact Denise Stubbs CPA at (828) 570-5760 or Info@DeniseStubbsCPA.com to schedule your back-to-school tax review.

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This blog post is provided for educational purposes only and does not constitute personalized financial, tax, or investment advice. Tax laws are complex, change frequently, and vary based on individual circumstances. Before implementing any strategies discussed, please consult with qualified financial advisors, tax professionals, or CPAs who can assess your specific situation. This content should not be relied upon as a substitute for professional consultation.