Mazars Ireland encourages people paying college fees to know their tax relief rights

Many over-estimate level of relief available. Relief cannot be claimed on 100% of tuition fees.

People are encouraged to understand exactly what tax relief covers and the level of support available to them to avoid a financial shock.

Mazars Ireland is advising college students, parents and anyone who supports college students to ensure they are fully aware of the college fee tax reliefs available to them. The firm has warned against the common misconception that all fees and costs are subject to the standard 20% tax relief.

While the 20% relief can be claimed on approved undergraduate and postgraduate courses, it is essential to note that tax relief cannot be claimed on examination or administration fees, or any part of the tuition fees that are covered by a grant, scholarship or an employer.

Furthermore, there are specific criteria concerning the eligibility for relief on undergraduate and postgraduate accounts.

These are:

Approved Undergraduate courses

  • Must be carried out in an approved college.
  • Must last at least two academic years
  • Must be carried out in an approved college.
  • Must last at least one academic year but be no longer than four academic years.
  • Must lead to a postgraduate award based on either a thesis or examination.
  • You must already have an undergraduate degree or equivalent qualification to claim relief on a postgraduate degree.

Approved Postgraduate Courses

It is also very important to be aware of the actual proportion of the overall fee that relief can be claimed on. A claim cannot be made on 100% of the course fee, rather there is a ‘disregard’ amount that should be factored in - €3,000 for a full-time course and €1,500 for a part-time course meaning that relief is available on a smaller amount (full fee amount minus the disregard amount). It should also be noted that the maximum that can be claimed for an undergraduate or postgraduate course is €7,000 per person per course, meaning that relief can only be claimed on €4,000 for a full-time course, equating to €800 (20%) tax relief.

Finally, the guidance from Mazars shows that the method of payment of college fees should be considered carefully when factoring in available tax relief. Whether the payment is made in instalments or upfront could significantly impact the relief available (guidance and example in ‘Notes to Editor’ section).

Commenting on the guidance, Siobhan O’ Moore , Senior Manager Private Client Tax at Mazars Ireland commented; “College can be an expensive time for students and anyone providing financial support. While there is tax relief available, we have found that people can over-estimate the level of tax support they will receive. While people can claim 20% back on tuition fees, factors such as the type of course, payment structure and other costs such as accommodation need to be accounted for. We advise anyone paying for college fees and associated costs to plan early, map out expected costs and allow for unknown occurrences, and check with Revenue.ie to fully understand the relief options.”

Related pages

ET-Tax

Tax

In providing tailored solutions to the individual needs of our clients, Mazars tax examine and offer a comprehensive range of tax services to national and international clients with a particular emphasis on helping them to structure their businesses and financial affairs tax efficiently.

Download pdf 626.17 kB