What does Illinois General Information Letter IT 19-0009-GIL conclude about Education Expense Credit?

Plain-English summary

A parent who home-schools a child asked the Illinois Department of Revenue whether three specific categories of expenses count as "qualified education expenses" for the Illinois Education Expense Credit: (1) consumable school supplies like paper, pencils, and art supplies used as lab fees across math, science, social studies, language arts, and fine arts; (2) a family membership to a local children's museum and zoo used regularly as part of a science/music/fine-arts "lab course"; and (3) private piano lessons treated as tuition toward a fine-arts requirement. The Department answered each item separately based on the statute and its own income tax rules.

The Education Expense Credit, found at 35 ILCS 5/201(m), lets an Illinois-resident custodian of a K-12 pupil claim a credit equal to 25% of "qualified education expenses" above $250, capped at $750 per family (for tax years ending on or after December 31, 2017), subject to an income cap. The Department's rule, 86 Ill. Adm. Code 100.2165(b)(4), defines "qualified education expenses" as tuition, book fees, and lab fees, and specifically excludes any item that is not "substantially consumed" during the school year, meaning items that remain the pupil's or custodian's property afterward do not qualify.

Applying that framework, the Department concluded that the consumable school supplies described likely qualify as "lab fees" because they are used up in lab-type courses, assuming all other statutory requirements are met. The children's museum and zoo family membership, however, does not qualify: because the membership stays valid for the roughly 189 days outside the required 176 days of school attendance under 105 ILCS 5/10-19, it is not "substantially consumed" during the school year and remains usable (and thus retains value) for non-school purposes. The private piano lessons, by contrast, can qualify as tuition toward the fine-arts requirement, as long as the lessons are part of the K-12 education program and the other Section 201(m) requirements are satisfied.

Because this is a General Information Letter (GIL) issued under 86 Ill. Adm. Code 1200.120(b) and (c), it is not a statement of Department policy and is not binding on the Department. It simply applies the existing statute and rule to the facts the taxpayer described, and the Department noted the taxpayer could instead request a binding Private Letter Ruling under 86 Ill. Adm. Code 1200.110(b) if desired.

What this means for you

Home-schooling parents

If you home-school a K-12 child in Illinois, consumable supplies used up in a lab-style course (paper, art supplies, science materials, etc.) can count as qualified "lab fees," and private lessons like piano that satisfy a course requirement (e.g., fine arts) can count as "tuition" — both subject to the $250 floor, 25% credit rate, and $750 cap. But recurring memberships or admissions (like a museum or zoo family membership) generally will not qualify unless they are only valid during, and used up within, the school year itself — a membership good year-round is not "substantially consumed" by the roughly 176 days of required attendance.

Individual taxpayers claiming the credit

Keep documentation showing that consumable items were actually used up during the school year and tied to a specific course, and that any tuition-like payment (such as lessons) relates to a defined subject in your child's K-12 curriculum. Items you keep afterward — non-consumable textbooks, equipment, instruments, or memberships good beyond the school term — are the kind of expenses the Department is most likely to disallow.

Accountants and tax professionals

This GIL is a useful illustration of how the Department applies the "substantially consumed" test in 86 Ill. Adm. Code 100.2165(b)(4)(C) to close factual calls, but remember it is non-binding guidance limited to the facts presented. For a client who needs certainty on a specific, similar fact pattern, the Department's own suggestion — requesting a binding Private Letter Ruling under 86 Ill. Adm. Code 1200.110(b) — is the more defensible path.

Common questions

Q: Do consumable school supplies for a home-schooled child qualify for the Education Expense Credit?
A: The Department said supplies like paper, pencils, and art supplies used up in lab-type courses (math, science, social studies, language arts, fine arts) appear consistent with the definition of "lab fees," assuming they are substantially consumed during the school year and all other Section 201(m) requirements are met.

Q: Does a children's museum or zoo family membership qualify?
A: No. The Department concluded it does not qualify as a "lab fee" because the membership remains usable well beyond the 176 days of required school attendance and is not substantially consumed during the school year. It noted a membership valid only during the school year could qualify instead.

Q: Do private piano lessons count as tuition?
A: Yes, potentially. The Department said private piano lessons could qualify as tuition toward a fine-arts requirement if the lessons are part of the K-12 education program, the child receives credit for completing the coursework, and the other requirements of Section 201(m) are met.

Q: Is this letter binding on the Department?
A: No. As a General Information Letter under 86 Ill. Adm. Code 1200.120(b) and (c), it is general guidance only, not a statement of Department policy, and not binding. A taxpayer wanting a binding answer on their specific facts can request a Private Letter Ruling under 86 Ill. Adm. Code 1200.110(b).

Citations and references

• 35 ILCS 5/201(m) (Illinois Income Tax Act, Education Expense Credit — 25% credit, $750 cap, income limits)
• 86 Ill. Adm. Code 100.2165(b)(4) (definition of "qualified education expenses," including tuition, book fees, and lab fees, and the "substantially consumed" test)
• 86 Ill. Adm. Code 1200.120(b) and (c) (General Information Letters are general guidance, not binding on the Department)
• 86 Ill. Adm. Code 1200.110(b) (requirements for requesting a binding Private Letter Ruling)
• 105 ILCS 5/10-19 (Illinois School Code — 176 days of required pupil attendance)
• Illinois Department of Revenue Publication 119 (qualified education expenses for home-schooled students)

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/income-tax/2019.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/income-tax/2019/it19-0009-gil.pdf

Original ruling text

IT-19-0009-GIL 05/23/2019 EDUCATION EXPENSE CREDIT
Explanation of how education expense credit applies to various items used for home schooling
purposes. (This is a GIL.)

May 23, 2019

Re: Illinois income tax
Dear Xxxx:
This is in response to your letter received March 11, 2019, in which you request information regarding
Illinois income tax. The nature of your request and the information you have provided require that we
respond with a General Information Letter, which is designed to provide general information, is not a
statement of Department policy and is not binding on the Department. See 86 Ill. Adm. Code
1200.120(b) and (c), which may be found on the Department's web site at www.tax.illinois.gov.
Your letter states as follows:
I am inquiring about qualified education expenses of home schooled student for tax year 2018
prior to filing. After reading the guidelines on PUB-119 (R-02/18) and speaking with a
representative at the Springfield office of the Illinois Department of Revenue, I am writing to
confirm that the following are qualified education expenses for home schooled students. The
following expenses are justified using the Illinois Department of Revenue Education Expense
Credit General Rules and Requirements for Home Schools.

1. Consumable school supplies used for the subjects of math, science, social studies,
   language arts, and the fine arts. These would include paper, pencils, art supplies, and
   other consumable school supplies. I consider these lab fees for the “supplies, equipment,
   materials, and instruments,” as required by my child’s lab course, as defined by my home
   school curriculum.
2. Local children’s museum and local zoo membership would qualify under lab fees. My
   child uses our local children’s museum and zoo on a regular basis as part of our lab
   course in the areas of science, music, and the fine arts. My child uses these facilities for
   “observation, experimentation, or practice” as part of the “student’s education program.”
   A family membership is required to these facilities, because my child’s father and I are
   my child’s teachers.
3. Private piano lessons qualify as tuition to fulfill my child’s fine art requirements. This
   would be the equivalent of “fees paid for the child to satisfy physical education class
   requirement at a private facility such as a health club.”
   RULING
   The legal description of the Education Expense Credit can be found in Section 201(m) of the Illinois
   Income Tax Act (“IITA”; 35 ILCS 5/1-1 et seq.). That statute provides as follows:
   (m)

Education expense credit.

IT 19-0009-GIL
Page 2
Beginning with tax years ending after December 31, 1999, a taxpayer who is the
custodian of one or more qualifying pupils shall be allowed a credit against the tax imposed by
subsections (a) and (b) of this Section for qualified education expenses incurred on behalf of the
qualifying pupils. The credit shall be equal to 25% of qualified education expenses, but in no
event may the total credit under this subsection claimed by a family that is the custodian of
qualifying pupils exceed (i) $500 for tax years ending prior to December 31, 2017, and (ii) $750
for tax years ending on or after December 31, 2017. In no event shall a credit under this
subsection reduce the taxpayer's liability under this Act to less than zero. Notwithstanding any
other provision of law, for taxable years beginning on or after January 1, 2017, no taxpayer may
claim a credit under this subsection (m) if the taxpayer's adjusted gross income for the taxable
year exceeds (i) $500,000, in the case of spouses filing a joint federal tax return or (ii) $250,000,
in the case of all other taxpayers. This subsection is exempt from the provisions of Section 250
of this Act.
For purposes of this subsection:
"Qualifying pupils" means individuals who (i) are residents of the State of Illinois, (ii) are
under the age of 21 at the close of the school year for which a credit is sought, and (iii) during
the school year for which a credit is sought were full-time pupils enrolled in a kindergarten
through twelfth grade education program at any school, as defined in this subsection.
"Qualified education expense" means the amount incurred on behalf of a qualifying
pupil in excess of $250 for tuition, book fees, and lab fees at the school in which the pupil
is enrolled during the regular school year.
"School" means any public or nonpublic elementary or secondary school in Illinois that is
in compliance with Title VI of the Civil Rights Act of 1964 and attendance at which satisfies the
requirements of Section 26-1 of the School Code, except that nothing shall be construed to
require a child to attend any particular public or nonpublic school to qualify for the credit under
this Section.
"Custodian" means, with respect to qualifying pupils, an Illinois resident who is parent,
the parents, a legal guardian, or the legal guardians of the qualifying pupils.
Bold emphasis added. Qualified education expenses are further defined in Section 100.2165(b)(4) of
the Department’s Income Tax Rules, 86 Ill. Adm. Code 100.2165(b)(4), which provides:
4)
"Qualified education expenses" shall mean amounts incurred on behalf of a qualifying
pupil in excess of $250 for tuition, book fees, and lab fees at the school in which the qualifying
pupil is enrolled during the regular school year (IITA Section 201(m)). Amounts incurred for
tuition, book fees and lab fees by a family that is the custodian of more than one qualifying pupil
may aggregate all tuition, book fees and lab fees incurred by the family in arriving at qualified
education expenses eligible for the credit.
A)

Tuition is the amount paid to a school as a condition of enrollment for a quarter, semester
or year term in a kindergarten through twelfth grade education program of the school.
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IT 19-0009-GIL
Page 3
Enrollment in an education program shall mean admission to the full and regular schedule
of classroom instruction of the school during the designated period. Tuition also includes
amounts paid as a condition of enrollment on behalf of a school to cover costs of
implementing and administering an education program.
B)

Book fees are amounts paid for the use of books that are essential to a qualifying pupil's
participation in the education program of the school. A book is essential when the school
or an instructor of the school requires its use by the qualifying pupil in order to participate
in and complete a course of the education program.

C)

Lab fees are amounts paid for the use of supplies, equipment, materials or instruments
that are essential to a qualifying pupil's participation in a lab course of the school's
education program. Supplies, equipment, materials or instruments are essential when the
school or an instructor of the school requires their use by the qualifying pupil in order to
participate in and complete a lab course of the education program. Lab courses include
those courses that, in addition to classroom instruction by a teacher, provide an
environment of organized activity involving observation, experimentation or practice in a
course of study. Such courses of study include those courses with a scientific, musical,
artistic, technical or language skill content. Lab fees may be in the nature of a rental fee
for supplies, equipment, materials or instruments that are used in the lab course. Fees
incurred for the purchase of supplies, equipment, materials or instruments used in a lab
course and which are substantially consumed by the assignments and activities of the lab
are also considered qualifying lab fees.

Any amount paid for the purchase of items that would be considered qualified education
expenses but for the fact that the items are not substantially consumed during the school
year and will remain the tangible personal property of a qualifying pupil or a custodian at
the conclusion of the school year shall not be considered qualified education expenses.
For purposes of this Section, an item is substantially consumed when, during the school
year, the item is used to such an extent that its fair market value has been reduced to a
de minimis amount.
Bold emphasis added. Assuming that the items are substantially consumed during the school year, the
“consumable school supplies” listed in your first numbered paragraph appear to be consistent with the
definition of “lab fees” provided by Section 100.2165(b)(4)(C) of the Department’s Income Tax Rules,
86 Ill. Adm. Code 100.2165(b)(4)(C). Assuming that all other requirements of Section 201(m) of the
IITA are met, items considered “lab fees” would be considered “qualified education expenses” eligible
for the Education Expense Credit.
Although they may be used a part of a lab course where your child will observe, experiment, or practice,
as described, the children’s museum and local zoo membership would not meet the definition of
“qualified education expenses” under “lab fees” because they are personal property which are not
significantly used up during the student’s participation in the class and will remain the property of the
student, parent or legal guardian at the end of the school year. Section 10-19 of the Illinois School
Code, 105 ILCS 5/10-19, requires 176 days of actual pupil attendance. That leaves 189 days where
the memberships are valid to be used for non-school related attendance. Because of this, the
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IT 19-0009-GIL
Page 4
memberships are not substantially consumed throughout the year and are not considered “qualified
education expenses.” If the memberships were only valid during the school year, and were, therefore,
substantially consumed during the school year, then they may qualify as lab fees eligible for the
Education Expense Credit.
Under 86 Ill. Adm. Code 100.2165(b)(4), “tuition” is defined as “the amount paid to a school as a
condition of enrollment for a quarter, semester or year term in a kindergarten through twelfth grade
education program of the school.” As long as the lessons are being taken as part of a kindergarten
through twelfth grade education program, your child receives credit for attending and successfully
completing the coursework at the lessons, and the other requirements of Section 201(m) of the IITA
are met, they should meet the requirements of qualified educational expenses eligible for the Education
Expense Credit.
This analysis is consistent with the description of “what are qualified education expenses for home
schooled students?” in Publication 119, a publication you refer to in your letter. Page 3 of Publication
119 states:
“Specifically, qualified education expenses for home schooled children include the amount of
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tuition paid for a student who was in the equivalent of kindergarten through twelfth grade. This
includes fees paid for the child to satisfy physical education class requirements at a private
facility such as a health club.
fees for the purchase of student’s workbooks or teacher’s grade books that are significantly
used up during the activities of the class. These expenses qualify even if they were paid to an
out-of-state company.
book rental fees paid for the rental of books that were required as part of the student’s education
program.
curriculum rental fees paid for the rental of educational items such as lectures or class lessons
on DVD or tape.
lab fees paid for the use of supplies, equipment, materials, or instruments that were required as
part of a lab course in the student’s education program.
Lab courses include those courses, for which the student will receive credit toward graduation,
that provide an environment for organized activity involving observation, experimentation, or
practice, i.e., science, music, art, or language.
Note →Any purchased equipment, materials, or instruments that are significantly used up by the
assignments and activities of the lab are considered qualified lab fees.
shipping charges paid to receive a qualified item.
sales or use taxes paid when purchasing a qualified item.

…
Education expenses that do not qualify for an education expense credit include the amount of

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IT 19-0009-GIL
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expenses paid to purchase items that are not significantly used up during the student’s
participation in the class (e.g., non-consumable textbooks, flash cards, wall maps, calculators,
etc.).
expenses paid to purchase an item that will remain the personal property of the student,
parent, or legal guardian at the end of the school year (e.g., payments made toward the purchase
of a band instrument or athletic equipment).
mileage or travel expenses paid to travel to school, lab activities, or field trips.
expenses paid for tutoring or enrichment classes that do not count toward meeting the
required curriculum.”

Emphasis added.
As stated above, this is a general information letter which does not constitute a statement of policy that
applies, interprets or prescribes the tax laws, and it is not binding on the Department. If you are not
under audit and you wish to obtain a binding Private Letter Ruling regarding your factual situation,
please submit all of the information set out in items 1 through 8 of Section 1200.110(b). If you have
any further questions regarding this letter, you may contact me at (217) 782-2844.

Sincerely,

Michael D. Mankowski
Associate Counsel - Income Tax

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