Form IT-272: NY College Tuition Credit or Deduction

New York State’s Form IT-272 offers a method for taxpayers to lower their state income tax liability through either a tax credit or an itemized deduction based on undergraduate college tuition payments. This form is for New York residents who have paid these educational costs for themselves, a spouse, or a dependent. The primary function of Form IT-272 is to calculate the potential tax benefit from these expenses.

Determining Your Eligibility

To claim the college tuition credit, the taxpayer must be a full-year New York State resident. However, part-year residents may be eligible to claim the college tuition itemized deduction. Married couples filing separately must each claim their own expenses on separate IT-272 forms.

The student for whom the tuition was paid must be the taxpayer, the taxpayer’s spouse, or a dependent that the taxpayer can claim on their New York return. If a student is claimed as a dependent by their parents, the student cannot claim the credit or deduction, even if they paid the expenses themselves; the right to the benefit transfers to the person claiming them. The student must be an undergraduate enrolled in an approved institution of higher education, which includes institutions eligible to participate in federal student aid programs.

Identifying Qualifying Tuition Expenses

Qualified college tuition expenses are the amounts paid for undergraduate tuition required for enrollment or attendance. This figure is the net amount after subtracting any tax-free educational assistance, such as scholarships or grants. To determine your qualified expenses, you must use itemized tuition bills from the institution. The federal Form 1098-T cannot be used to verify the qualifying amounts for the New York credit or deduction.

Expenses that do not qualify include:

• Room and board
• Student health fees
• Insurance and transportation
• Books, supplies, and equipment

Any tuition paid with funds from a student loan is considered paid by the student and is eligible, but employer-reimbursed expenses are not.

Calculating the Credit or Deduction

Form IT-272 allows you to calculate either a refundable credit or an itemized deduction, but you cannot claim both. The college tuition credit is calculated as the lesser of $400 per eligible student or the actual amount of qualified tuition paid per student. Because it is a refundable credit, you can receive it as a refund even if you have no New York tax liability.

The alternative is an itemized deduction, which reduces your New York adjusted gross income (AGI). The maximum deduction you can claim is based on the total qualified tuition expenses paid, up to a limit of $10,000 per eligible student. This deduction is reduced for taxpayers with a New York AGI above certain thresholds and is eliminated entirely for those with an AGI over $1,000,000. Generally, taxpayers with higher incomes who already itemize their deductions may find the deduction provides a greater financial benefit than the flat-rate credit. You can calculate your tax liability using both methods to select the one that results in a lower tax.

Filing Form IT-272

The completed Form IT-272 must be submitted with your annual New York State income tax return. It is not a standalone document but an attachment that supports the figures you report on your main return, such as Form IT-201 for full-year residents. If you are filing your taxes electronically, tax software will automatically include Form IT-272 with your submission when you enter your tuition information. For those who file by mail, a physical copy must be attached to the paper tax return.

Regardless of the filing method, it is important to keep records that support the amounts claimed. This includes itemized tuition bills and receipts or bank statements showing the tuition payments. These documents should be stored with your copy of the filed tax return in case the New York State Department of Taxation and Finance requires verification.