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Question for the Money Doctors

Question submitted on Jun 21, 2016.

Question

A grandfather is interested in paying for part of his grandchild's school tuition (non-college, 6th grade). What is the best way, tax-wise, to do this? Thank you!

Answer

There are no tax credits or deductions when paying for a grandchild's private primary or secondary school tuition.  

As an estate planning tool, grandparents can pay the tuition directly to the school, and it is excluded from the annual gift tax limit.  A grandparent would be able to give the child an additional $14,000 (in 2016) without triggering the necessity of a gift tax return.


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