Updated: 3 December 2020
Whether your child is taking a full-time or part-time third level course, it is definitely worth looking into tax relief on third level fees. You could save a lot of money
College is an undoubtedly exciting time in any student's life. But it can also be an expensive time for parents and students alike.
After all, a variety of college costs must be covered (think textbooks food and rent!).
The good news is that there is a tax relief that many college fee payers – parents or students – can potentially benefit from.
In this guide we’re going to take a look at tuition fee tax relief – what it is and how you can claim tax back on your college costs easily online.
Tax relief on third level education courses – what is it?
Third level fee payers can claim tax relief on tuition fees (including the student contribution) that are paid for eligible education courses.
The relief is available to whomever is paying the cost of the fees – students and parents (or for an individual paying the fees on the student's behalf).
And if you are paying for more than one child to go to college this September, the good news is that there is no limit on the number of individuals for whom you can claim.
You can claim tax relief on tuition fees paid for:
- Undergraduate course
- Postgraduate courses
- IT and foreign language courses
You are not able to claim tax relief on:
- Administration fees or examination
- Tuition fees that are met by a scholarship or otherwise or where the fees are reimbursed by an employer.
Tax relief is granted at 20% - the standard rate of tax. However, there is a limit of fees, at €7,000 per course, on which you can claim relief.
So in other words, I can claim relief up to a maximum of €7,000 per course?
Not exactly, no. Before calculating the tax relief, you must also factor in the ‘disregard’ amount.
There are different disregard amounts for full-time (€3,000) and part-time (€1,500) courses.
This means that there is no tax relief on the first €3,000/ €1,500 spent on tuition fees for the 2020/21 academic year.
The disregard amount is subtracted from your qualifying fees when you are calculating your tax relief. One disregard amount is applied to each claim for every tax year. In other words, you can't receive relief on the relevant disregard amount of the fees.
So, for example, Ryan will be starting college this September. Kevin, his father, will be paying for his tuition. Ryan's tuition fees are €4,500 and his student contribution is €3,500. Qualifying fees for tax relief are capped at €7,000. So, when the disregard amount is taken away, this leaves a total of €4,000. Kevin is entitled to tax relief at 20% of this amount – which is €800.
Many parents have more than one child studying at third level simultaneously and this is the most common type of claim for relief. It’s important to note that, if you are paying fees for more than one course or student, you only have to subtract the disregard amount once.
For example, David pays college tuition fees for his two children, Sean and Sharon. Sean is starting a full-time course. The tuition fees amount to €5,500 plus a student contribution of €3,000. Sharon is also starting third level education. She has enrolled in a part-time course, where tuition fees amount to €2,500 plus the student contribution of €1,500.
The qualifying tuition fees are €7,000 (full-time course fees of €8,500 are restricted to €7,000) and €4,000, for a total of €11,000.
When David subtracts the disregard amount of €3,000 from €11,000, his total is €8,000. David is entitled to tax relief of 20% on this amount, which amounts to €1,600.
Furthermore, if a student is studying more than one third level course at the same time, qualifying fees are restricted to €7,000 per course but you only need to apply one disregard amount to the claim (if one of those courses is full-time then you must use the full-time disregard amount).
The average Irish tax refund is €1,880
How can I tell if my course is eligible for tax relief?
Generally speaking, all courses in Ireland that are provided by publicly funded universities, colleges and institutes of higher education are approved for tax relief. And, if your child is studying further afield, they may still qualify for relief. Courses provided by publicly funded or duly accredited universities and institutions in other European Union (EU) Member States are also approved. And if you are studying at a distance, courses provided by colleges or institutions in other EU Member States that provide distance education in Ireland are also eligible for tax relief.
There are also some determining factors which decide if a particular course is accepted.
Your undergraduate course will be eligible as long as it is of at least two years' duration and ticks one of the boxes below:
- An approved full-time and part-time undergraduate course in either a private or publicly funded third-level college in the State
- An approved full-time and part-time undergraduate course in either a private or publicly funded third-level college in any EU member state. This includes courses in medicine, veterinary medicine, dentistry and teacher training
- A full-time or part-time undergraduate course operated by colleges in any EU member state providing distance education in the State
Alternatively, if you are hoping for relief on a postgraduate course, the person taking the course must already have a primary degree or an equivalent qualification.
The course must also be for at least one academic year and not more than four academic years in duration and has to lead to a postgraduate award based on either a thesis or exams.
Tax relief is available for tuition fees paid for:
- Approved postgraduate courses in private and publicly funded colleges in the State
- Postgraduate courses in a university or publicly funded college in another EU member state, including such colleges that provide distance education in the State
- Postgraduate courses in a university or publicly funded third-level college in non-EU countries.
Information technology and foreign language courses
Tax relief is available in respect of fees paid for training courses in information technology and foreign languages (other than postgraduate courses) if the course:
- is less than two years' duration
- results in the awarding of a certificate of competence (and not just a certificate of attendance)
- is approved by SOLAS
- fees paid are not less than €315 and not more than €1,270 (the course fees, not simply an amount per annum)
If you would like to look up a particular course, complete lists of approved colleges and courses are published on the Revenue website each year.
If you fall under any of these categories, you could be entitled to claim the relief of the standard rate of tax (20%) where the fess range between €315 and €1,270.
However, if your course was funded by a grant, scholarship, or your employer, you cannot claim relief on the costs. And if you receive partial funding, you must declare so for Revenue.
This PDF document outlines which courses are applicable for this tax relief.
I'm not paying the total amount of course fees in the same tax year. Can I still qualify for relief?
In short, yes. If you want to claim relief on your tuition fee instalments, there are a number of options open to you.
You can choose to claim relief on your tuition fee instalments either in the tax year that the academic year commenced or in the tax year in which you paid the instalment. If you claim relief for the tax year that the instalment was paid in, you must subtract the disregard amount that applies to that year.
Similarly, there are a number of options open to you if you are planning to pay tuition fees in advance. In a situation where details of actual amounts due for each year are available, then that amount is allowed each year for the duration of the course (subject to the €7,000 per year ceiling as well as the relevant disregard amount). If no breakdown of fees is available, the relief can be divided evenly over the duration of the course.
Are all fees associated with an approved course eligible?
There are some third level fees which tax relief can’t be claimed on. For starters, examination, registration, or administration fees are not eligible for tax relief.
It is also not possible to claim relief for fees that are funded by grants scholarships or by an employer. And if you are receiving partial funding towards tuition fees, you must declare this to Revenue when you are making a claim for tax relief.
Finally, if you claim tax relief for tuition fees that are later refunded by the college, you must notify Revenue within 21 days of receiving the refund.
How can I find out if I’m entitled to any other tax reliefs?
If you have tax questions, or you are unsure of how to claim tax reliefs you’re entitled to, Taxback.com can help. Our team of experts can file your tax return for you, claim any expenses and reliefs that you are entitled to and even retrieve the maximum tax refund that you are due.
The average Irish tax refund is €1,880