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Figuring the Amount Not Subject to the 10% Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Reporting Early Distributions . . . . . . . . . . . . . . . 56 Chapter 9. Education Savings Bond Program . . . . . . . . . . . . . . . . . . . . . . . . 57 Who Can Cash in Bonds Tax Free? . . . . . . . . . . 57 Figuring the Tax-Free Amount . . . . . . . . . . . . . . 58 Claiming the Exclusion . . . . . . . . . . . . . . . . . . . 58 Chapter 10. Employer-Provided Educational Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Chapter 11. Business Deduction for Work-Related Education . . . . . . . . . . . . . . . . 59 Qualifying Work-Related Education . . . . . . . . . . 60 What Expenses Can Be Deducted? . . . . . . . . . . 63 How To Treat Reimbursements . . . . . . . . . . . . . 65 Deducting Business Expenses . . . . . . . . . . . . . 66 Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . 67 Chapter 12. How To Get Tax Help . . . . . . . . . . . . 67 Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 Future Developments For the latest information about developments related to Pub. 970, such as legislation enacted after it was published, go to IRS.gov/Pub970. What's New Higher education emergency grants. Emergency fi- nancial aid grants under the following are not included in your gross income. • The CARES Act. • The Coronavirus Response and Relief Supplemental Appropriations Act, 2021. • The American Rescue Plan Act of 2021. Also, for purposes of the American opportunity tax credit (see chapter 2) and lifetime learning credit (see chapter 3), a student does not reduce an amount of quali- fied tuition and related expenses by the amount of an emergency financial aid grant. For more information, see Higher Education Emergency Grants Frequently Asked Questions. Lifetime learning credit. For 2021, the amount of your lifetime learning credit is gradually reduced (phased out) if your MAGI is between $80,000 and $90,000 ($160,000 and $180,000 if you file a joint return). You can't claim the credit if your MAGI is $90,000 or more ($180,000 or more if you file a joint return). See chapter 3. Student loan interest deduction. • For 2021, the amount of your student loan interest de- duction is gradually reduced (phased out) if your MAGI is between $70,000 and $85,000 ($140,000 and $170,000 if you file a joint return). You can’t claim the deduction if your MAGI is $85,000 or more ($170,000 or more if you file a joint return). • You can’t deduct as interest on a student loan any in- terest paid by your employer after March 27, 2000, and before January 1, 2026, under an educational as- sistance program. See chapter 4. Student loan forgiveness. The American Rescue Plan Act of 2021 modified the treatment of student loan forgive- ness for discharges in 2021 through 2025. See chapter 5. Tuition and fees deduction. The Taxpayer Certainty and Disaster Tax Relief Act of 2020 repealed the tuition and fees deduction for tax years beginning after 2020. In- come limitations for the lifetime learning credit were in- creased to help filers transition to the lifetime learning credit. We removed former chapter 6 and renumbered chapters 7 through 13 for this revision. Education savings bond program. For 2021, the amount of your education savings bond interest exclusion is gradually reduced (phased out) if your MAGI is between $83,200 and $98,200 ($124,800 and $154,800 if you file a joint return). You can't exclude any of the interest if your MAGI is $98,200 or more ($154,800 or more if you file a joint return). See chapter 9. Business deduction for work-related education. Gen- erally, if you claim a business deduction for work-related education and you drive your car to and from school, the amount you can deduct for miles driven from January 1, 2021, through December 31, 2021, is 56 cents a mile. See chapter 11. Reminders Form 1098-T, Tuition Statement. When figuring an ed- ucation credit or tuition and fees deduction, use only the amounts you paid and are deemed to have paid during the tax year for qualified education expenses. In most ca- ses, the student should receive Form 1098-T from the eli- gible educational institution by January 31, 2022. How- ever, the amount on Form 1098-T might be different from the amount you actually paid and are deemed to have paid. In addition, Form 1098-T should give you other infor- mation for that institution, such as adjustments made for prior years, the amount of scholarships or grants, reim- bursements, or refunds, and whether the student was en- rolled at least half-time or was a graduate student. The eli- gible educational institution may ask for a completed Form W-9S, Request for Student's or Borrower's Taxpayer Identification Number and Certification, or similar state- ment to obtain the student's name, address, and taxpayer identification number. Form 1098-T requirement. To be eligible to claim the American opportunity credit or lifetime learning credit, the Page 2 Publication 970 (2021)