Question: I find the area of tuition with regard to CC to be confusing. The paper application identifies tuition and fees as a deduction from income. In looking at drafts of tax forms like 1040, 8962 and 1095A, I don't see how this will work. The tuition deduction has been removed from 1040 and I have not seen anyplace where tuition will affect income as it relates to CC. Thinking it should be deducted as the forms continue to have that as a deduction from estimated income. Would you have any insight into how tuition will be deducted from income for purposes and can you confirm that it would be deductible?
Answer: According to IRS Tax Publication 970, you can reduce your income subject to tax by up to $4,000 per year. This would apply to Covered California subsidy eligibility as well.