Tax Breaks for Nurse Practitioner Students

Day 55 and counting of procrastinating from filing my taxes…Maybe this weekend? Yesterday I discussed a few tax considerations for nurse practitioners accepting job offers. Today, I’m moving on to NP students. Fortunately, many nurse practitioner students are eligible for tax benefits due to their educational status.

Keep in mind these possible tax credits, deductions, and other perks when filing your taxes if you’re a nurse practitioner student.

Tax Credits

If you were enrolled in a nurse practitioner program last year, congratulations! You may have a tax credit coming your way. There are two awards nurse practitioner students may be eligible to claim, the American Opportunity Tax Credit and the Lifetime Learning Credit. Unfortunately, you must choose one or the other, you can’t claim both. Keep in mind that tax credits directly reduce the amount you owe when it comes to your taxes. If the credit amounts to more than you owe, you will receive it as a refund.

The American Opportunity Tax Credit

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The American Opportunity Tax Credit awards a maximum of $2,500 annually to qualifying students towards the cost of higher education. To be eligible for the credit you must be enrolled in a graduate program at least part time. The benefit may only be awarded annually for the first four years of higher education. Nurse practitioner students hoping to claim this credit in full are eligible only if they have an adjusted gross income of less than $80,000 ($160,000 or less for married couples filing jointly).

The Lifetime Learning Credit

The Lifetime Learning Credit helps pay for both undergraduate and graduate education. Eligible students can receive a credit of up to $2,000 annually towards the cost of their education. Unlike the American Opportunity Credit, there is no limit on the number of years this credit may be claimed. To claim the full credit, the nurse practitioner student’s modified adjusted gross income must be below $52,000 ($104,000 or less for married couples filing jointly).


Tax deductions reduce the amount of your income subject to taxes. Claiming deductions when you file your taxes reduces your overall tax liability. Nurse practitioner students may be able to claim some hefty deductions when filing their taxes.

Tuition and Fees Deduction

Nurse practitioner students can reduce their taxable income by up to $4,000 by claiming a tuition and fees deduction. To claim the deduction, the NP student must have an adjusted gross income of less than $80,000 ($160,000 or less for married couples filing jointly).

Student Loan Interest Deduction

While most types of interest are not deductible on your tax return, interest paid towards your educational loans may be treated differently when you file your taxes. For individuals with a modified adjusted gross income of less than $75,000 ($150,000 if filing a joint return), may be able to reduce taxable income by up to $2,500 for loan interest paid towards higher education.

Educational Expense Deduction

Some educational expenses nurse practitioner students incur may also be deducted from taxable income. This includes items like books, school supplies and equipment. Be careful here. In most cases, specific conditions must be met. Save your receipts for education related expenses so your accountant can clue you in as to what you may deduct.

Income Exclusions

As a nurse practitioner student, you may be able to exclude some employer-based benefits associated with your education so you won’t have to pay taxes on them. If your employer provides assistance towards the cost of your education, you can exclude up to $5,250 of this benefit from your taxable wages for the year.

The bottomline? Nurse practitioner students may be eligible for quite a few tax breaks. To make sure you reap the full rewards of your student status, it’s worth getting an expert involved in filing your taxes. This way you won’t miss out on any credits, deductions or exclusions you have coming your way.


You Might Also Like: The Inside Scoop on Financial Aid for Nurse Practiitoner Students


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