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H&r Block Free Tax Software

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H&r Block Free Tax Software

H&r block free tax software 5. H&r block free tax software   Student Loan Cancellations and Repayment Assistance Table of Contents Introduction Student Loan CancellationQualifying Loans Student Loan Repayment Assistance Introduction Generally, if you are responsible for making loan payments, and the loan is canceled (forgiven), you must include the amount that was forgiven in your gross income for tax purposes. H&r block free tax software However, if you fulfill certain requirements, two types of student loan assistance may be tax free. H&r block free tax software The types of assistance discussed in this chapter are: Student loan cancellation, and Student loan repayment assistance. H&r block free tax software Student Loan Cancellation If your student loan is canceled, you may not have to include any amount in income. H&r block free tax software This section describes the requirements for tax-free treatment of canceled student loans. H&r block free tax software Qualifying Loans To qualify for tax-free treatment, for the cancellation of your loan, your loan must have been made by a qualified lender to assist you in attending an eligible educational institution and contain a provision that all or part of the debt will be canceled if you work: For a certain period of time, In certain professions, and For any of a broad class of employers. H&r block free tax software The cancellation of your loan will not qualify for tax-free treatment if it is cancelled because of services you performed for the educational institution that made the loan or other organization that provided the funds. H&r block free tax software See Exception, later. H&r block free tax software Eligible educational institution. H&r block free tax software   This is an educational institution that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities. H&r block free tax software Qualified lenders. H&r block free tax software   These include the following. H&r block free tax software The United States, or an instrumentality thereof. H&r block free tax software A state, territory, or possession of the United States, or the District of Columbia, or any political subdivision thereof. H&r block free tax software A public benefit corporation that is tax-exempt under section 501(c)(3); and that has assumed control of a state, county, or municipal hospital; and whose employees are considered public employees under state law. H&r block free tax software An eligible educational institution, if the loan is made: As part of an agreement with an entity described in (1), (2), (3) under which the funds to make the loan were provided to the educational institution, or Under a program of the educational institution that is designed to encourage its students to serve in occupations with unmet needs or in areas with unmet needs where the services provided by the students (or former students) are for or under the direction of a governmental unit or a tax-exempt section 501(c)(3) organization. H&r block free tax software   Occupations with unmet needs include medicine, nursing, teaching, and law. H&r block free tax software Section 501(c)(3) organization. H&r block free tax software   This is any corporation, community chest, fund, or foundation organized and operated exclusively for one or more of the following purposes. H&r block free tax software Charitable. H&r block free tax software Religious. H&r block free tax software Educational. H&r block free tax software Scientific. H&r block free tax software Literary. H&r block free tax software Testing for public safety. H&r block free tax software Fostering national or international amateur sports competition (but only if none of its activities involve providing athletic facilities or equipment). H&r block free tax software The prevention of cruelty to children or animals. H&r block free tax software Exception. H&r block free tax software   The cancellation of your loan does not qualify as tax-free student loan cancellation if your student loan was made by an educational institution and is canceled because of services you performed for the educational institution or other organization that provided the funds. H&r block free tax software Refinanced Loan If you refinanced a student loan with another loan from an eligible educational institution or a tax-exempt organization, that loan may also be considered as made by a qualified lender. H&r block free tax software The refinanced loan is considered made by a qualified lender if it is made under a program of the refinancing organization that is designed to encourage students to serve in occupations with unmet needs or in areas with unmet needs where the services required of the students are for or under the direction of a governmental unit or a tax-exempt section 501(c)(3) organization. H&r block free tax software Student Loan Repayment Assistance Student loan repayments made to you are tax free if you received them for any of the following: The National Health Service Corps (NHSC) Loan Repayment Program (NHSC Loan Repayment Program). H&r block free tax software A state education loan repayment program eligible for funds under the Public Health Service Act. H&r block free tax software Any other state loan repayment or loan forgiveness program that is intended to provide for the increased availability of health services in under served or health professional shortage areas (as determined by such state). H&r block free tax software You cannot deduct the interest you paid on a student loan to the extent payments were made through your participation in the above programs. H&r block free tax software Prev  Up  Next   Home   More Online Publications
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Life Insurance

Your need for life insurance will change with changes in your life. For example, the arrival of children usually triggers a sharp increase in the amount you need. As children grow older and leave the nest, you will probably need less protection.

Term life insurance policies are the least costly. They pay death benefits but have no cash value if you decide to stop making payments. As the word "term" suggests, these policies are in effect for a specific period of time-one year or until you reach a certain age are common. You can compare life insurance policies online.

Whole life, universal life, and other cash value policies combine a long-term savings and investment product with life insurance. Canceling these policies after only a few years can more than double your life insurance costs.

If you have misplaced a life insurance policy, your state’s insurance commission may be able to help you locate it. Or you can search for it at the Policy Locator. If the insurance company knows that an insured person has died, but cannot locate the beneficiaries, the company must turn the benefits over to the state’s unclaimed property office. Check with that office if you believe that you are due a benefit. You can avoid losing your life insurance policy by alerting the policy beneficiaries and filing a copy with your will.

Disability Insurance

Disability can be more disastrous financially than death. If you are disabled, you lose your earning power, but you still have living expenses and often huge expenses for medical care. Disability insurance helps you replace lost income. Many employers offer some type of disability insurance coverage for employees, or you can get an individual disability insurance policy. There are two types of disability policies: short-term disability (STD) and long-term disability (LTD). Short-term disability policies have a maximum benefit of two years, while long-term disability policies have benefits that can last the rest of your life. When purchasing disability insurance, ask:

  • How is disability defined? Some policies consider you disabled if you are unable to perform the duties of any job. Better plans pay benefits if you are unable to do the usual duties of your own occupation.
  • When do benefits begin? Most plans have a waiting period after an illness before payments begin.
  • How long do benefits last? After the waiting period, payments are usually available till you reach age 65, though shorter or longer terms are also available.
  • What dollar amount is promised? Can benefits be reduced by Social Security disability and workers' compensation payments? Are the benefits adjusted for inflation? Will the policy provider continue making contributions to your pension plan so you have retirement benefits when the disability coverage ends?

For more information on disability insurance, visit Insurance Information Institute or America's Health Insurance Plans.

The H&r Block Free Tax Software

H&r block free tax software 1. H&r block free tax software   Scholarships, Fellowships, Grants, and Tuition Reductions Table of Contents Reminder Introduction Scholarships and FellowshipsTax-Free Scholarships and Fellowships Taxable Scholarships and Fellowships Reporting Scholarships and Fellowships Other Types of Educational AssistanceFulbright Grants Pell Grants and Other Title IV Need-Based Education Grants Payment to Service Academy Cadets Veterans' Benefits Qualified Tuition Reduction Reminder Individual retirement arrangements (IRAs). H&r block free tax software  You can set up and make contributions to an IRA if you receive taxable compensation. H&r block free tax software Under this rule, a taxable scholarship or fellowship is compensation only if it is shown in box 1 of your Form W-2, Wage and Tax Statement. H&r block free tax software For more information about IRAs, see Publication 590. H&r block free tax software Introduction This chapter discusses the income tax treatment of various types of educational assistance you may receive if you are studying, teaching, or researching in the United States. H&r block free tax software The educational assistance can be for a primary or secondary school, a college or university, or a vocational school. H&r block free tax software Included are discussions of: Scholarships, Fellowships, Need-based education grants, such as a Pell Grant, and Qualified tuition reductions. H&r block free tax software Many types of educational assistance are tax free if they meet the requirements discussed here. H&r block free tax software Special rules apply to U. H&r block free tax software S. H&r block free tax software citizens and resident aliens who have received scholarships or fellowships for studying, teaching, or researching abroad. H&r block free tax software For information about these rules, see Publication 54, Tax Guide for U. H&r block free tax software S. H&r block free tax software Citizens and Resident Aliens Abroad. H&r block free tax software Scholarships and Fellowships A scholarship is generally an amount paid or allowed to, or for the benefit of, a student (whether an undergraduate or a graduate) at an educational institution to aid in the pursuit of his or her studies. H&r block free tax software A fellowship is generally an amount paid for the benefit of an individual to aid in the pursuit of study or research. H&r block free tax software Amount of scholarship or fellowship. H&r block free tax software   The amount of a scholarship or fellowship includes the following: The value of contributed services and accommodations. H&r block free tax software This includes such services and accommodations as room (lodging), board (meals), laundry service, and similar services or accommodations that are received by an individual as a part of a scholarship or fellowship. H&r block free tax software The amount of tuition, matriculation, and other fees that are paid or remitted to the student to aid the student in pursuing study or research. H&r block free tax software Any amount received in the nature of a family allowance as a part of a scholarship or fellowship. H&r block free tax software Tax-Free Scholarships and Fellowships A scholarship or fellowship is tax free (excludable from gross income) only if you are a candidate for a degree at an eligible educational institution. H&r block free tax software A scholarship or fellowship is tax free only to the extent: It does not exceed your expenses; It is not designated or earmarked for other purposes (such as room and board), and does not require (by its terms) that it cannot be used for qualified education expenses; and It does not represent payment for teaching, research, or other services required as a condition for receiving the scholarship. H&r block free tax software (But for exceptions, see Payment for services,later. H&r block free tax software Use Worksheet 1–1 to figure the amount of a scholarship or fellowship you can exclude from gross income. H&r block free tax software Candidate for a degree. H&r block free tax software   You are a candidate for a degree if you: Attend a primary or secondary school or are pursuing a degree at a college or university, or Attend an educational institution that: Provides a program that is acceptable for full credit toward a bachelor's or higher degree, or offers a program of training to prepare students for gainful employment in a recognized occupation; and Is authorized under federal or state law to provide such a program and is accredited by a nationally recognized accreditation agency. H&r block free tax software Eligible educational institution. H&r block free tax software   An eligible educational institution is one whose primary function is the presentation of formal instruction and that normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities. H&r block free tax software Qualified education expenses. H&r block free tax software   For purposes of tax-free scholarships and fellowships, these are expenses for: Tuition and fees required to enroll at or attend an eligible educational institution, and Course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution. H&r block free tax software These items must be required of all students in your course of instruction. H&r block free tax software Expenses that do not qualify. H&r block free tax software   Qualified education expenses do not include the cost of: Room and board, Travel, Research, Clerical help, or Equipment and other expenses that are not required for enrollment in or attendance at an eligible educational institution. H&r block free tax software Payment for services. H&r block free tax software   Generally, you cannot exclude from your gross income the part of any scholarship or fellowship that represents payment for teaching, research, or other services required as a condition for receiving the scholarship. H&r block free tax software This applies even if all candidates for a degree must perform the services to receive the degree. H&r block free tax software (See exceptions next. H&r block free tax software ) Exceptions. H&r block free tax software   You do not have to treat as payment for services the part of any scholarship or fellowship that represents payment for teaching, research, or other services if you receive the amount under: The National Health Service Corps Scholarship Program, or The Armed Forces Health Professions Scholarship and Financial Assistance Program. H&r block free tax software Example 1. H&r block free tax software You received a scholarship of $2,500. H&r block free tax software The scholarship was not received under either of the exceptions mentioned above. H&r block free tax software As a condition for receiving the scholarship, you must serve as a part-time teaching assistant. H&r block free tax software Of the $2,500 scholarship, $1,000 represents payment for teaching. H&r block free tax software The provider of your scholarship gives you a Form W-2 showing $1,000 as income. H&r block free tax software Your qualified education expenses were at least $1,500. H&r block free tax software Assuming that all other conditions are met, $1,500 of your scholarship is tax free. H&r block free tax software The $1,000 you received for teaching is taxable. H&r block free tax software Example 2. H&r block free tax software You are a candidate for a degree at a medical school. H&r block free tax software You receive a scholarship (not under either of the exceptions mentioned above) for your medical education and training. H&r block free tax software The terms of your scholarship require you to perform future services. H&r block free tax software A substantial penalty applies if you do not comply. H&r block free tax software The entire amount of your grant is taxable as payment for services in the year it is received. H&r block free tax software Athletic Scholarships An athletic scholarship is tax free only if and to the extent it meets the requirements discussed later. H&r block free tax software Worksheet 1-1. H&r block free tax software    You can use Worksheet 1-1, Taxable Scholarship and Fellowship Income , later, to figure the tax-free and taxable parts of your athletic scholarship. H&r block free tax software    Worksheet 1-1. H&r block free tax software Taxable Scholarship and Fellowship Income 1. H&r block free tax software Enter the total amount of any scholarship or fellowship for 2013. H&r block free tax software See Amount of scholarship or fellowship, earlier. H&r block free tax software 1. H&r block free tax software       If you are a degree candidate at an eligible educational institution, go to line 2. H&r block free tax software If you are not a degree candidate at an eligible educational institution, stop here. H&r block free tax software The entire amount is taxable. H&r block free tax software For information on how to report this amount on your tax return, see Reporting Scholarships and Fellowships , earlier, in this chapter. H&r block free tax software       2. H&r block free tax software Enter the amount from line 1 that was for teaching, research, or any other services required as a condition for receiving the scholarship. H&r block free tax software (Do not include amounts received for these items under the National Health Service Corps Scholarship Program or the Armed Forces Health Professions Scholarship and Financial Assistance Program. H&r block free tax software ) 2. H&r block free tax software     3. H&r block free tax software Subtract line 2 from line 1 3. H&r block free tax software     4. H&r block free tax software Enter the amount from line 3 that your scholarship or fellowship required you to use for other than qualified education expenses 4. H&r block free tax software     5. H&r block free tax software Subtract line 4 from line 3 5. H&r block free tax software     6. H&r block free tax software Enter the amount of your qualified education expenses 6. H&r block free tax software     7. H&r block free tax software Enter the smaller of line 5 or line 6. H&r block free tax software This amount is the most you can exclude from your gross income (the tax-free part of the scholarship or fellowship) 7. H&r block free tax software     8. H&r block free tax software Subtract line 7 from line 5 8. H&r block free tax software     9. H&r block free tax software Taxable part. H&r block free tax software Add lines 2, 4, and 8. H&r block free tax software See Reporting Scholarships and Fellowships , earlier, for how to report this amount on your tax return 9. H&r block free tax software     Taxable Scholarships and Fellowships If and to the extent your scholarship or fellowship does not meet the requirements described earlier, it is taxable and must be included in gross income. H&r block free tax software You can use Worksheet 1–1, Taxable Scholarship and Fellowship Income, later, to figure the tax-free and taxable parts of your scholarship or fellowship. H&r block free tax software Reporting Scholarships and Fellowships Whether you must report your scholarship or fellowship depends on whether you must file a return and whether any part of your scholarship or fellowship is taxable. H&r block free tax software If your only income is a completely tax-free scholarship or fellowship, you do not have to file a tax return and no reporting is necessary. H&r block free tax software If all or part of your scholarship or fellowship is taxable and you are required to file a tax return, report the taxable amount as explained below. H&r block free tax software You must report the taxable amount whether or not you received a Form W-2. H&r block free tax software If you receive an incorrect Form W-2, ask the payer for a corrected one. H&r block free tax software For information on whether you must file a return, see Publication 501, Exemptions, Standard Deduction, and Filing Information, or your income tax form instructions. H&r block free tax software How To Report How you report any taxable scholarship or fellowship income depends on which return you file. H&r block free tax software Form 1040EZ. H&r block free tax software   If you file Form 1040EZ, include the taxable amount in the total on line 1. H&r block free tax software If the taxable amount was not reported on Form W-2, also enter “SCH” and the taxable amount in the space to the left of line 1. H&r block free tax software Form 1040A. H&r block free tax software   If you file Form 1040A, include the taxable amount in the total on line 7. H&r block free tax software If the taxable amount was not reported on Form W-2, also enter “SCH” and the taxable amount in the space to the left of line 7. H&r block free tax software Form 1040. H&r block free tax software   If you file Form 1040, include the taxable amount in the total on line 7. H&r block free tax software If the taxable amount was not reported on Form W-2, also enter “SCH” and the taxable amount on the dotted line next to line 7. H&r block free tax software Schedule SE (Form 1040). H&r block free tax software   To determine your net earnings from self-employment, include amounts you receive under a scholarship as pay for your services that are reported to you on Form 1099-MISC, Miscellaneous Income. H&r block free tax software If your net earnings are $400 or more, you must pay self-employment tax. H&r block free tax software Use Schedule SE, Self-Employment Tax, to figure this tax. H&r block free tax software Form 1040NR. H&r block free tax software   If you file Form 1040NR, report the taxable amount on line 12. H&r block free tax software Generally, you must report the amount shown in box 2 of Form(s) 1042-S, Foreign Person's U. H&r block free tax software S. H&r block free tax software Source Income Subject to Withholding. H&r block free tax software See the Instructions for Form 1040NR for more information. H&r block free tax software Form 1040NR-EZ. H&r block free tax software   If you file Form 1040NR-EZ, report the taxable amount on line 5. H&r block free tax software Generally, you must report the amount shown in box 2 of Form(s) 1042-S. H&r block free tax software See the Instructions for Form 1040NR-EZ for more information. H&r block free tax software Other Types of Educational Assistance The following discussions deal with other common types of educational assistance. H&r block free tax software Fulbright Grants A Fulbright grant is generally treated as a scholarship or fellowship in figuring how much of the grant is tax free. H&r block free tax software Pell Grants and Other Title IV Need-Based Education Grants These need-based grants are treated as scholarships for purposes of determining their tax treatment. H&r block free tax software They are tax free to the extent used for qualified education expenses during the period for which a grant is awarded. H&r block free tax software Payment to Service Academy Cadets An appointment to a United States military academy is not a scholarship or fellowship. H&r block free tax software Payment you receive as a cadet or midshipman at an armed services academy is pay for personal services and will be reported to you in box 1 of Form W-2. H&r block free tax software Include this pay in your income in the year you receive it unless one of the exceptions, discussed earlier under Payment for services , applies. H&r block free tax software Veterans' Benefits Payments you receive for education, training, or subsistence under any law administered by the Department of Veterans Affairs (VA) are tax free. H&r block free tax software Do not include these payments as income on your federal tax return. H&r block free tax software If you qualify for one or more of the education benefits discussed in chapters 2 through 12, you may have to reduce the amount of education expenses qualifying for a specific benefit by part or all of your VA payments. H&r block free tax software This applies only to the part of your VA payments that is required to be used for education expenses. H&r block free tax software You may want to visit the Veteran's Administration website at www. H&r block free tax software gibill. H&r block free tax software va. H&r block free tax software gov for specific information about the various VA benefits for education. H&r block free tax software Example. H&r block free tax software You have returned to college and are receiving two education benefits under the latest GI Bill: (1) a $1,534 monthly basic housing allowance (BHA) that is directly deposited to your checking account, and (2) $3,840 paid directly to your college for tuition. H&r block free tax software Neither of these benefits is taxable and you do not report them on your tax return. H&r block free tax software You also want to claim an American opportunity credit on your return. H&r block free tax software You paid $5,000 in qualified education expenses (see chapter 2, American Opportunity Credit , later). H&r block free tax software To figure the amount of credit, you must first subtract the $3,840 from your qualified education expenses because this payment under the GI Bill was required to be used for education expenses. H&r block free tax software You do not subtract any amount of the BHA because it was paid to you and its use was not restricted. H&r block free tax software Qualified Tuition Reduction If you are allowed to study tuition free or for a reduced rate of tuition, you may not have to pay tax on this benefit. H&r block free tax software This is called a “tuition reduction. H&r block free tax software ” You do not have to include a qualified tuition reduction in your income. H&r block free tax software A tuition reduction is qualified only if you receive it from, and use it at, an eligible educational institution. H&r block free tax software You do not have to use the tuition reduction at the eligible educational institution from which you received it. H&r block free tax software In other words, if you work for an eligible educational institution and the institution arranges for you to take courses at another eligible educational institution without paying any tuition, you may not have to include the value of the free courses in your income. H&r block free tax software The rules for determining if a tuition reduction is qualified, and therefore tax free, are different if the education provided is below the graduate level or is graduate education. H&r block free tax software You must include in your income any tuition reduction you receive that is payment for your services. H&r block free tax software Eligible educational institution. H&r block free tax software   An eligible educational institution is one that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities. H&r block free tax software Officers, owners, and highly compensated employees. H&r block free tax software   Qualified tuition reductions apply to officers, owners, or highly compensated employees only if benefits are available to employees on a nondiscriminatory basis. H&r block free tax software This means that the tuition reduction benefits must be available on substantially the same basis to each member of a group of employees. H&r block free tax software The group must be defined under a reasonable classification set up by the employer. H&r block free tax software The classification must not discriminate in favor of owners, officers, or highly compensated employees. H&r block free tax software Payment for services. H&r block free tax software   Generally, you must include in income the part of any qualified tuition reduction that represents payment for teaching, research, or other services by the student required as a condition of receiving the qualified tuition reduction. H&r block free tax software This applies even if all candidates for a degree must perform the services to receive the degree. H&r block free tax software (See below for exceptions. H&r block free tax software ) Exceptions. H&r block free tax software   You do not have to include in income the part of any scholarship or fellowship that represents payment for teaching, research, or other services if you receive the amount under: The National Health Service Corps Scholarship Program, or The Armed Forces Health Professions Scholarship and Financial Assistance Program. H&r block free tax software Education Below the Graduate Level If you receive a tuition reduction for education below the graduate level (including primary, secondary, or high school), it is a qualified tuition reduction, and therefore tax free, only if your relationship to the educational institution providing the benefit is described below. H&r block free tax software You are an employee of the eligible educational institution. H&r block free tax software You were an employee of the eligible educational institution, but you retired or left on disability. H&r block free tax software You are a widow or widower of an individual who died while an employee of the eligible educational institution or who retired or left on disability. H&r block free tax software You are the dependent child or spouse of an individual described in (1) through (3), above. H&r block free tax software Child of deceased parents. H&r block free tax software   For purposes of the qualified tuition reduction, a child is a dependent child if the child is under age 25 and both parents have died. H&r block free tax software Child of divorced parents. H&r block free tax software   For purposes of the qualified tuition reduction, a dependent child of divorced parents is treated as the dependent of both parents. H&r block free tax software Graduate Education A tuition reduction you receive for graduate education is qualified, and therefore tax free, if both of the following requirements are met. H&r block free tax software It is provided by an eligible educational institution. H&r block free tax software You are a graduate student who performs teaching or research activities for the educational institution. H&r block free tax software You must include in income any other tuition reductions for graduate education that you receive. H&r block free tax software How To Report Any tuition reduction that is taxable should be included as wages in box 1 of your Form W-2. H&r block free tax software Report the amount from Form W-2, box 1, on line 7 (Form 1040 or Form 1040A) or line 1 (Form 1040EZ). H&r block free tax software Prev  Up  Next   Home   More Online Publications