You cannot deduct the costs of nonqualifying education, even if it
meets both of the tests described earlier for qualifying education.
Nonqualifying education is education that:
- Is needed to meet the minimum educational requirements of
your present trade or business, or
- Is part of a program of study that can qualify you for a new
trade or business.
Figure A. Does Your Education Qualify?
You can use Figure A as a quick check to see if your
Education To Meet
Education needed to meet the minimum educational requirements for
your present trade or business is nonqualifying education. The minimum
education necessary is determined by:
- Laws and regulations,
- Standards of your profession, trade, or business, and
- Your employer's requirements.
Once you have met the minimum educational requirements that were in
effect when you were hired, you do not have to meet minimum
educational requirements again. This means that if the minimum
requirements change after you were hired, any education you need to
meet the new requirements is qualifying education.
You have not necessarily met the minimum educational requirements
of your trade or business simply because you are already doing the
You are a full-time engineering student. You work part time as an
engineer for a firm that will employ you as a full-time engineer after
you finish college. Although your college engineering courses improve
your skills in your present job, you have not met the minimum job
requirements for a full-time engineer. The education is nonqualifying
You are an accountant and you have met the minimum educational
requirements of your employer. Your employer later changes the minimum
educational requirements and requires you to take college courses to
keep your job. These additional courses are not minimum requirements
because you have already satisfied the initial minimum requirements.
The education is qualifying education.
However, education that a new accountant coming into the firm needs
to satisfy the new minimum requirements would be nonqualifying
education for the new accountant.
Requirements for Teachers
This discussion applies to teachers and others employed by
The state or school district usually sets the minimum educational
requirements for teachers. The requirement is the college degree or
the minimum number of college hours usually required of a person hired
for that position.
If no requirements exist, you will have met the minimum educational
requirements when you become a faculty member. You generally will be
considered a faculty member when one or more of the
- You have tenure.
- Your years of service count toward obtaining tenure.
- You have a vote in faculty decisions.
- Your school makes contributions for you to a retirement plan
other than social security or a similar program.
The law in your state requires beginning secondary school teachers
to have a bachelor's degree, including ten professional education
courses. In addition, to keep the job, a teacher must complete a fifth
year of training within 10 years from the date of hire. If the
employing school certifies to the state Department of Education that
qualified teachers cannot be found, the school can hire persons with
only 3 years of college. However, to keep their jobs, these teachers
must get a bachelor's degree and the required professional education
courses within 3 years.
Under these facts, the bachelor's degree, whether or not it
includes the ten professional education courses, is considered the
minimum educational requirement for qualification as a teacher in your
If you have all the required education except the fifth year, you
have met the minimum educational requirements. The fifth year of
training is qualifying education unless it is part of a program of
study that will qualify you for a new trade or business.
Assume the same facts as in Example 1 except that you
have a bachelor's degree and only six professional education courses.
The additional four education courses are qualifying education.
Although you do not have all the required courses, you have already
met the minimum educational requirements.
Assume the same facts as in Example 1 except that you
are hired with only 3 years of college. The courses you take that lead
to a bachelor's degree (including those in education) are
nonqualifying education. They are needed to meet the minimum
educational requirements for employment as a teacher.
You have a bachelor's degree and you work as a temporary instructor
at a university. At the same time, you take graduate courses toward an
advanced degree. The rules of the university state that you can become
a faculty member only if you get a graduate degree. Also, you can keep
your job as an instructor only as long as you show satisfactory
progress toward getting this degree. You have not met the minimum
educational requirements to qualify you as a faculty member. The
graduate courses are nonqualifying education.
Certification in a new state.
Once you have met the minimum educational requirements for teachers
for your state, you are considered to have met the minimum educational
requirements in all states. This is true even if you must get
additional education to be certified in another state. Any additional
education you need is qualifying education. You have already met the
minimum requirements for teaching and teaching in another state is not
a new trade or business.
You hold a permanent teaching certificate in State A and are
employed as a teacher in that state for several years. You move to
State B and are promptly hired as a teacher. You are required,
however, to complete certain prescribed courses to get a permanent
teaching certificate in State B. These additional courses are
qualifying education because the teaching position in State B involves
the same general kind of work for which you were qualified in State A.
Qualifies You for a
New Trade or Business
Education that is part of a program of study that can qualify you
for a new trade or business is nonqualifying education. This is true
even if you do not plan to enter that trade or business.
If you are an employee, a change of duties that involves the same
general kind of work is not a new trade or business.
You are an accountant. Your employer requires you to get a law
degree at your own expense. You register at a law school for the
regular curriculum that leads to a law degree. Even if you do not
intend to become a lawyer, the education is nonqualifying because the
law degree will qualify you for a new trade or business.
You are a general practitioner of medicine. You take a 2-week
course to review developments in several specialized fields of
medicine. The course does not qualify you for a new profession. It is
qualifying education because it maintains or improves skills required
in your present profession.
While working in the private practice of psychiatry, you enter a
program to study and train at an accredited psychoanalytic institute.
The program will lead to qualifying you to practice psychoanalysis.
The psychoanalytic training does not qualify you for a new profession.
It is qualifying education because it maintains or improves skills
required in your present profession.
Bar or CPA Review Course
Review courses to prepare for the bar examination or the certified
public accountant (CPA) examination are nonqualifying education. They
are part of a program of study that can qualify you for a new
Teaching and Related Duties
All teaching and related duties are considered the same general
kind of work. A change in duties in any of the following ways is not
considered a change to a new business.
- Elementary school teacher to secondary school teacher.
- Teacher of one subject, such as biology, to teacher of
another subject, such as art.
- Classroom teacher to guidance counselor.
- Classroom teacher to school administrator.
Previous | First | Next
Publication Index | 2000 Tax Help Archives | Tax Help Archives | Home