During the COVID-19 pandemic, many students have been required to study from home. Suddenly many families found themselves “homeschooling,” of sorts. While many parents plan to send their children back to school and have begun to do so, others have decided to continue homeschooling their children, but wonder what effect it has on their taxes.
In Pennsylvania, the short answer is that homeschooling itself does not affect your taxes. In other words, your homeschooling client may not deduct school expenses, and since PA homeschoolers can, for the most part, only teach their own children or dependents, they do not count as “educators” per the IRS guidelines, and thus cannot receive an educator expense deduction. In Topic No. 458, the IRS defines eligible educators as those who work at least 900 hours during the year in a school, providing elementary or secondary education. Under the current circumstances, with many educators working from home rather than in a school setting, there may be some adjustments to that definition in the future; however, this is as it stands right now.
Obviously, if a parent chooses to stay home with children to teach them, curtailing work hours or quitting work entirely, this will have an effect on the family taxes. We recommend you discuss with your clients the various options they have in order to take the greatest advantage of tax breaks while fulfilling their desire to homeschool their children. Starting a personal business on the side, which the homeschooling parent can operate on a limited basis, may provide some tax advantages to help compensate for the loss of income.
If your client has a child with special needs who requires tutoring, this may be deductible as a medical expense, as long as the tutoring is recommended by a doctor and the tutor is specially trained for the service provided. This applies to tutors for learning disabilities, not for behavioral problems.
Be creative as you help your clients determine the best way to provide their children with the education they think is best while still taking advantage of as many tax opportunities as they can. Brainstorming with them about their options will demonstrate your sincere desire to help them maximize their financial benefits and will build tremendous client goodwill.
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