TO: Synagogue Rabbis, Day School Administrators, Parents & Community Leaders
FROM: Howie Beigelman, Deputy Director of Public Policy
DATE: July 27, 2005
RE: Tax Deductibility for Special Education Expenses
Important Advisory to Day School Parents and Administrators: Tuition expenses for Special Education may be deductible under a recent IRS private letter ruling.
The OU, through the Institute for Public Affairs (IPA) and the National Jewish Council for Disabilities (NJCD), advise you that the Internal Revenue Service has recently issued a private letter ruling relevant to all parents whose children receive any special education services and to consult their tax advisor on whether the ruling may apply to them.
A copy of the IRS ruling can be viewed at: http://www.irs.gov/pub/irs-wd/0521003.pdf.
Private letters may not be cited as precedent or as binding on the IRS; however, they do indicate where the IRS stands on an issue.
The IRS ruling notes:
Tuition is only deductible, like all medical expenses, if deductions are itemized and if the expense exceeds 7.5% of adjusted gross income;
The special education must be focused on correcting a medical defect (e.g. a speech impediment) or helping the student to lead a more normal life;
A physician or other qualified medical professional must diagnose the medical handicap;
Note that in a case where a child goes to a full time special education program, the entire tuition may be deductible.
Day School administrators, synagogue rabbis, tax advisors, financial planners should all make their constituents or clients aware of this new development.
For more information, or with any questions, please contact the OU (IPA or NJCD).