Can I Deduct Continuing Education Costs? + FAQs

Yes — you can deduct continuing education costs, but only under specific conditions defined by tax law.

According to a 2022 Strategic Education survey, 44% of working Americans say they must continue their education to remain competitive in today’s workforce. Yet not all those expenses will get you a tax break. The IRS has strict rules on when formal education, professional certifications, workshops, or online courses can be written off.

💼 Work-related only – Not all classes qualify. The IRS lets you deduct training only if it maintains or improves skills in your current job (or is required to keep your job). A career-changing degree won’t cut it.
🚫 No double-dipping – Employees beware. From 2018 through 2025, most W-2 employees can’t deduct unreimbursed training costs on federal returns (thanks to the Tax Cuts and Jobs Act). Some states still offer a break, but the feds say no.
💰 Self-employed perks – Freelancers win here. If you’re self-employed or a business owner, you can write off seminars, certification courses, and workshops on Schedule C as business expenses – a direct reduction of business income.
⚖️ Court-tested cases – IRS vs Taxpayers. Tax courts have allowed MBA tuition and other degree costs as deductions when they enhanced an existing career. But they’ve struck down write-offs for education that led to a new profession.
🗺️ State tax breaks – Location matters. A handful of states (like California, New York, Pennsylvania, etc.) allow you to claim work-related education expenses even when federal law won’t. Your state might give you a second chance.

IRS Rules: When Can You Write Off Continuing Education?

The IRS’s short answer: You can deduct continuing education expenses only when the education is work-related under their rules. The training must either maintain or improve skills needed in your present work or be required by your employer (or by law) to keep your current salary, status, or job. In other words, if the coursework makes you better at your existing job or keeps you qualified for it, it’s potentially deductible.

The big catch: Even if the education meets the above tests, you cannot deduct it if either of these red-flag conditions apply:

It qualifies you for a new trade or business – If the course of study is something that would prepare you for a different career path, it’s considered a personal investment, not a business expense. For example, a marketer who takes accounting classes to switch careers into accounting can’t deduct that education. The IRS views it as training for a new profession.

It’s needed to meet the minimum requirements of your current job – If you’re getting initial education that qualifies you for your job in the first place, that’s not deductible. For instance, if you are an aspiring real estate agent taking the pre-licensing course (a minimum requirement to enter that field), those costs are personal and not deductible. The rule holds true even if you are already working in a role – say, a teacher pursuing a required master’s degree to keep your job; if that master’s was a baseline requirement, it’s not deductible.

Examples of what qualifies under IRS rules:

A CPA attending an advanced auditing workshop to stay current with accounting standards (maintains/improves skills in her existing profession).
A nurse taking a short course in the latest medical procedures to fulfill continuing education required for license renewal (required by law to maintain her job credentials).
A self-employed graphic designer taking an online course on new design software to better serve her clients (improves skills in her current business).

Examples of what doesn’t qualify:

A sales manager going back to school for a law degree to change careers (education qualifies her for a new profession as a lawyer).
A teacher who is getting their first required certification or degree needed to start teaching (that’s a minimum requirement to enter the field, so it’s not a deductible expense).
A corporate employee taking a coding bootcamp at night to pivot into a tech career (the bootcamp trains him for a new trade, not directly for his current job duties).

These IRS rules come from Treasury Regulation 1.162-5 and Section 162 of the Internal Revenue Code, which allow “ordinary and necessary” business expenses. Continuing education can count as an ordinary, necessary expense for your trade or business if it meets the above tests. Section 262, on the other hand, forbids deductions for personal expenses – which is why education for a new career or personal interest is off-limits.

Claiming the Deduction: Forms and Tax Details

Passing the IRS tests is only half the story – you also need to claim the expense correctly:

Self-Employed Individuals (Schedule C or F): If you’re a freelancer, independent contractor, or small business owner, qualified education costs are deducted on your Schedule C (Form 1040) (or Schedule F for farmers) as a business expense. This reduces your business profit directly. For example, if you run a consulting business and spend $2,000 on a professional conference related to your field, you’d list that $2,000 as an expense on Schedule C (often under “Other Expenses” labeled as training or education). It’s an above-the-line deduction, meaning it comes out of your gross income before you arrive at taxable income.

Employees (Form 2106 and Schedule A/1): Prior to 2018, if you were an employee with unreimbursed work education expenses, you could itemize them on Schedule A (as a miscellaneous deduction, subject to a 2% of AGI threshold). However, the tax law changes in 2018 (Tax Cuts and Jobs Act) suspended this deduction for most employees until 2026. For 2018–2025, W-2 employees generally cannot deduct continuing education costs on their federal return, even if the training meets the IRS’s work-related criteria.
- There are narrow exceptions: if you’re an Armed Forces reservist, a qualified performing artist, a fee-basis state or local government official, or a disabled employee with impairment-related education expenses, you can still deduct those costs. Those specific groups use Form 2106 (Employee Business Expenses) to calculate the education expenses, then typically take the deduction on Schedule 1 (as an adjustment to income) or Schedule A (for impairment expenses). For example, a qualifying performing artist (with low income and multiple gigs) can deduct necessary coaching or classes related to their art on Form 2106 despite the general suspension of employee deductions.

Education Credits vs. Deductions: If your continuing education happens to be at an eligible institution (e.g. you’re taking college courses or pursuing a degree that isn’t deductible as a business expense), you might be eligible for an education credit like the Lifetime Learning Credit (LLC). You cannot double-dip by taking a tax credit and a deduction for the same expense. Typically, if you qualify for a credit (which directly reduces taxes, up to $2,000 for the LLC), you’ll compare it against the benefit of a deduction. For instance, a self-employed taxpayer paying $5,000 for tuition might either deduct it on Schedule C or claim a $1,000 Lifetime Learning Credit (20% of $5,000). It pays to calculate which is more valuable – you want to maximize your tax savings, but you must choose one benefit per expense.

Employer Reimbursements: If your employer reimburses your continuing education, usually you cannot deduct it (since you didn’t pay out-of-pocket). The good news is many employer educational assistance programs (under Section 127) let you receive up to $5,250 per year tax-free for job-related or even personal education. If, say, your company pays for a $3,000 training course and does so under a qualified plan, that $3,000 isn’t included in your wages—and you don’t get a deduction (nor do you need one, because you never paid tax on that benefit).
- If your employer simply gives you money for courses and counts it as taxable wages (less common), then you’re effectively paying the tuition yourself. In that case, a deduction or credit might be possible (subject to the rules above), but at least you have that extra wage income to cover it. Always check if your employer offers tuition reimbursement; it’s often the best first option since it’s essentially “free” money for your education, with no tax cost to you up to the $5,250 limit.

What Not to Do: Education Expenses You Can’t Deduct

Avoid these common pitfalls when considering continuing education on your tax return:

Don’t deduct personal education – If the course isn’t directly tied to your current job or business, it’s likely personal. That wine-tasting class you took for fun, or the evening course on Italian literature unrelated to your day job, is not deductible. The IRS draws a hard line between personal enrichment and professional development. Even if you argue that any learning enhances you as a well-rounded employee, it won’t fly unless it has a clear, direct connection to your current role or business.

No deductions for new careers – As mentioned, training that prepares you for a new career is off-limits. Avoid trying to write off expenses like law school, medical school, pilot training, or any degree that qualifies you for a new profession – even if you intend to use some of those skills in your current job. The IRS specifically calls this out: education that qualifies you for a new trade or business is considered a personal expense. Trying to deduct it could be a red flag.

Beware of the time gap – You generally need to be “presently engaged” in the trade or business that the education relates to. If you leave your job and then go back to school full-time, you might lose the deduction because you’re not actively working in that field at the time. (There are some nuances – courts have allowed deductions during temporary unemployment or breaks, as long as you return to the same field. But a prolonged gap or a complete exit from the workforce can undermine your claim that the education was work-related.)

Avoid double benefit – As noted earlier, you can’t claim a double tax benefit. That means:
- If you get reimbursed by your employer, don’t also deduct the expense.
- If you use a scholarship or grant to pay for a course, you can only deduct any out-of-pocket portion you paid.
- If you claim an education credit for the tuition, you shouldn’t deduct the same tuition as a business expense.
No travel deduction if it’s mainly personal – If you travel for education, the travel costs are only deductible if the trip is primarily for a work-related educational purpose. For example, flying to a work conference or training seminar can be deductible. But if you turn it into a vacation or it’s an excuse to travel (say, a Spanish teacher traveling to Spain “for language immersion” without a formal program), the IRS won’t accept the travel expense. Education-related travel has to pass strict tests – it should be a business trip, not personal travel with some learning on the side.

Keep it reasonable – Only “ordinary and necessary” expenses qualify. This means the costs should be common in your field and helpful for your work. Extravagant or unusual expenses labeled as education might get denied. For instance, a software developer attending a standard coding bootcamp is ordinary; paying for a luxury retreat that loosely ties in professional development might not be seen as necessary for your business. Stick to credible courses, tuition, books, workshops, professional conference fees, etc., that have a clear business purpose.

In short, don’t try to write off education that is personal, extravagant, or only tangentially related to your current work. If you’re unsure, err on the side of caution or consult a tax professional. The IRS tends to scrutinize education deductions, given how often people push the envelope by attempting to deduct career-changing or personal-interest studies.

5 Common Scenarios: Can I Deduct This Course?

Let’s bring the rules to life. Here are common continuing education scenarios with a simple Yes/No verdict on deductibility:

Scenario	Deductible?
Maintaining a license or certification (e.g. a teacher taking required professional development workshops to keep her teaching certificate)	Yes – If you’re self-employed or an eligible employee, the cost is deductible because it’s required to maintain your current job credentials. (Federal deduction for W-2 teachers is currently no due to tax law changes, but some states allow it. Teachers may also use the separate $300 educator expense deduction for certain costs.)
Improving current job skills (e.g. an IT specialist takes an advanced cybersecurity course to deepen her expertise in her field)	Yes – This directly improves your skills in your present job, so it qualifies. A self-employed IT consultant would deduct it on Schedule C. An employee could deduct it on a state return or federal if they meet an exception, but generally not on the federal return until after 2025.
Education for a new career (e.g. a nurse enrolls in law school to become an attorney)	No – This education is training for a new trade or business. Even though the nurse might argue legal knowledge could help in healthcare administration, law school qualifies her for an entirely new profession (attorney). It’s personal investment in a career change, not a deductible work expense.
Meeting minimum requirements (e.g. an individual completes a real estate pre-licensing course to get their realtor license)	No – Courses that meet the minimum requirements for a job (like qualifying for a license or basic degree needed for a profession) are not deductible. Until you’re already established in a trade or business, education costs to reach that entry level are considered personal.
Self-employed professional development (e.g. a freelance photographer attends a workshop on advanced editing techniques)	Yes – For self-employed folks, this is an ordinary and necessary expense to improve current skills. The photographer can write off the workshop fee, travel, and related costs on Schedule C, boosting her expertise and getting a tax deduction.
Employer-paid training (e.g. your company paid $2,000 for you to attend a coding bootcamp, and it’s not counted as your taxable income)	No – You can’t deduct what you didn’t pay for. Since the employer covered it (and did not treat it as taxable wages to you), you get the benefit tax-free already. (If your employer included the $2,000 in your W-2 income instead, then you effectively paid it and potentially could deduct or credit it, but only if it otherwise qualifies.)
Unreimbursed training for employees (e.g. a marketing employee pays for an online course in data analytics out of pocket, not reimbursed by employer)	Yes (in theory) – This meets the work-related criteria (improves skills in current field). However, federal law currently disallows unreimbursed employee education expenses through 2025 for most people. So federally, it’s not deductible today. State: Depending on the state (like CA or NY), she might claim it on her state tax return. After 2025 (if laws revert), it could become a deductible miscellaneous itemized expense again on federal taxes.

(Each scenario assumes the IRS’s work-related criteria are met. Remember, employees face the additional hurdle of the current federal suspension on unreimbursed business deductions.)

Real-Life Examples: Education Deductions in Action

Sometimes it’s easier to understand these rules with real stories. Here are a few examples inspired by common situations:

1. Self-Employed Consultant Upskills (Deductible): Jenna is a self-employed marketing consultant. She enrolls in an online SEO certification course to keep up with digital marketing trends and better serve her clients. The $1,500 course fee, plus the cost of an SEO textbook, are deductible on her Schedule C. These expenses directly maintain and improve the skills she uses in her consulting business. Jenna keeps receipts and records of the course completion. At tax time, she lists the $1,500 as a business expense. This lowers her taxable self-employment income, effectively subsidizing part of her professional development. Jenna benefits by boosting her expertise and getting a tax break on the costs.

2. Employee Pursues an MBA (Not Deductible federally for now): Mark is an engineer working at a manufacturing firm. He decides to pursue a part-time MBA program to broaden his management skills. The MBA courses improve skills that can make him better at his current job (and position him for promotion). Under IRS rules, this education might qualify because it’s enhancing his skills in his current field and isn’t required to meet minimum job requirements (he’s already an engineer). However, Mark’s employer doesn’t require the MBA – it’s his choice – and he’s a regular W-2 employee. Federal tax law (2018–2025) means Mark cannot deduct his unreimbursed MBA tuition as an itemized deduction. If his employer had a tuition assistance program, he could have gotten some of it covered tax-free (but they don’t). Mark does, however, qualify for the Lifetime Learning Credit for his MBA tuition because it’s at an accredited university – this gives him a credit of 20% of tuition (up to $2,000 per year). He claims that credit since it’s the only tax benefit available. In the future (after 2025), if unreimbursed employee expenses become deductible again, someone like Mark could potentially deduct MBA costs (subject to the old 2% AGI limitation) if they meet the work-related criteria. But for now, Mark’s MBA is essentially a personal investment as far as his 1040 is concerned (aside from the education credit).

3. Career Change Dilemma (Not Deductible): Priya has been working as a financial analyst, but she wants to transition into data science. She decides to take a one-year Data Science Bootcamp program, paying $10,000 out of pocket. Even though her current job involves some analytics, this bootcamp will qualify her for a new role in a different field (data science). This is a classic case of education qualifying her for a new trade or business. Priya cannot deduct the $10,000 as a work expense. It doesn’t matter that there’s overlap in skills or that she might use data science in finance; what matters is that the program is designed to prepare her for a new career path. She’ll have to fund this career pivot without a tax deduction. (On the bright side, if the bootcamp is through an eligible institution, she might explore the Lifetime Learning Credit; if not, it’s just a personal cost.)

4. Required Continuing Ed for License (Deductible): Alex is a real estate agent and is self-employed (he’s an independent contractor under his brokerage). His state requires him to complete 20 hours of continuing education every two years to maintain his real estate license. Alex pays $500 for a series of workshops to fulfill this requirement. These costs are deductible as business expenses on his Schedule C. They’re ordinary and necessary for staying in business as a real estate agent. If Alex were an employee at a firm on a W-2, he’d face the federal deduction limitation – but as a self-employed individual, he can fully deduct the $500. This reduces his net business income and self-employment tax. Alex keeps certificates of completion and proof of payment, in case the IRS ever asks for substantiation that the education was required and related to his business.

5. Blurred Lines – Hobby or Business? (Tricky Scenario): Dana is an avid photographer who occasionally sells prints of her work. She’s not sure if she’s truly running a business or just pursuing a hobby with some income. She spends $1,200 on an advanced photography course to refine her skills. If Dana is treating photography as a business (reporting income on Schedule C), and the course genuinely helps her in that business, she could deduct it. But if photography is really a hobby (not a for-profit endeavor), she cannot deduct the course at all. (Post-2018, hobby expenses aren’t deductible either.) This example shows the importance of being clear about your activity – you must have a bona fide business (with intent to make a profit) to deduct “business” education. Dana decides to formalize her photography side gig as a business; she keeps records of her income and expenses. The $1,200 course then becomes a deductible business education expense, reducing the taxable profit from her photography in that year.

Each of these examples highlights a different angle: the advantage for self-employed people, the frustration for employees under current law, the absolute no-go of career-changing education, the straightforward case of required CEUs, and the need for having a true business. Real life can be nuanced, so always map your situation to the rules.

Tax Court Rulings: When the IRS Got Schooled (or Not)

The tug-of-war between taxpayers and the IRS over education deductions has led to some interesting tax court cases. The courts’ decisions give insight into how the rules play out:

MBA Victory – Lori Singleton-Clarke: In a well-known case, a nurse with a long career earned an MBA in healthcare management and deducted her tuition as unreimbursed employee expenses. The IRS challenged it, arguing the MBA qualified her for a new profession. But in Tax Court, Lori Singleton-Clarke won. The court ruled her MBA was sufficiently related to her existing field of nursing and health care administration – it improved her skills and did not qualify her for a new trade. Key factors: she remained in the healthcare industry, and the MBA didn’t lead to a new license or a completely different career. This case set a precedent that an MBA (or similar graduate degree) can be deductible if it’s a tool for advancement in the same general career rather than a ticket to a new one.

Executive MBA during Unemployment – Alex Kopaigora: Alex Kopaigora was an executive who started an MBA program while employed, then lost his job partway through the program. He continued his Executive MBA (commuting across states to attend) and was actively looking for new work in the same field. He claimed the MBA expenses as a deduction. The IRS said no, citing that you must be “presently engaged” in the business – they argued that his period of unemployment meant he wasn’t in business. The Tax Court disagreed, siding with Kopaigora. Because he returned to work in the same industry and had only a temporary break, the court viewed his education as related to his trade or business (management in his case). The deduction was allowed. The lesson here: a brief, temporary gap in employment won’t automatically disqualify your education expenses, as long as you resume work in the same field. The court looked at his intent and efforts to stay in the field.

When Education Was Not Allowed – New Career Examples: Courts have consistently denied deductions where the education clearly led to a new career. For instance, law school tuition has been disallowed even for someone working as a paralegal or law clerk while attending law school – because getting a J.D. qualifies you to become an attorney, a new profession. Similarly, a case involving a pilot’s training to get a commercial license was denied since it qualified the individual for a new job (pilot) that he wasn’t already doing. And a physician who pursued an MBA primarily to transition into hospital administration could be denied if the facts showed it was more about changing roles than enhancing the current one. The courts often examine the taxpayer’s intent and career trajectory. If the education is a stepping stone to switch fields, the IRS and courts draw the line.

Impairment-Related Education – Special Case: In a lesser-known area, if a person has a disability and incurs education expenses to help them continue working (for example, learning new skills after an injury or adapting to a disability), those costs can be deductible as impairment-related work expenses. These are typically claimed on Schedule A (and not subject to the usual 2% floor). The courts have been sympathetic in cases where the education is needed due to a disability to maintain employment. While not a common scenario, it’s worth noting that tax law provides a deduction path for those situations too, and the IRS generally follows the spirit of helping individuals remain employable despite impairments.

The “Ordinary and Necessary” Bar: The overarching theme in court rulings is that the burden is on the taxpayer to prove the education expense was ordinary and necessary for their line of work. Tax judges often parse what the person’s duties were before, during, and after the education. Did the job truly require or benefit from this education, or was the person primarily aiming for something else? Good documentation (like a letter from an employer stating the degree was directly related to the current job, or evidence that the person stayed in the same field post-education) can sway a case. In contrast, weak justifications (e.g., “I thought getting this degree would generally help me sometime in the future”) usually lose.

Bottom line from the courts: If you can demonstrate that your education was a bona fide business expense – tightly linked to your existing profession – the courts have shown a willingness to allow deductions, even for big-ticket items like graduate degrees. But if the education even smells like a pivot to a new career, the deduction will be shot down. The IRS often takes a hard line, but the courts have occasionally broadened what “maintaining or improving skills” can mean (as seen in the MBA cases). Still, those victories depended on strong facts showing continuity in the same field.

Personal vs. Business: How Education Expenses Differ

It’s crucial to distinguish between personal education costs and business education expenses. The label makes all the difference in taxes:

Personal Education (Non-Deductible): Education is personal when it’s not required for or directly connected to your current work. This includes learning for self-improvement, hobby courses, or anything that helps you start a new career. From a tax perspective, personal education is treated like any other personal spending (like buying clothes or a car) – it’s generally not deductible. You might get a tax credit if it’s formal higher education (think college tuition credits), but you can’t write it off as a business expense. For example, if you take a cooking class on weekends just because you enjoy it (and you’re an engineer by profession), that’s personal. Or if you decide to go back to school full-time to change careers, those tuition costs are personal investments in yourself.

Business Education (Deductible if rules met): This refers to continuing education that relates directly to making money in your current job or business. It’s an operating cost of doing business as far as the IRS is concerned. If you’re self-employed, it reduces your business profit; if you’re an employee (and in an allowed category or the law permits), it reduces your taxable income via an adjustment or itemized deduction. Business education is an investment in your professional skills that has a connection to your income. It’s treated like how a mechanic’s purchase of new tools would be – a necessary cost to perform or enhance the work. For example, a dentist attending a dental seminar to learn new techniques is incurring a business expense. Likewise, a software developer buying an online course on a programming language they use at work is spending money for business purposes (their labor is their business).

Employer’s Perspective vs. Individual: If you’re an employer or own a business with employees, paying for your employees’ continuing education is generally a deductible business expense for the company. The company can write it off just like salaries or other benefits. Employees who get this benefit don’t get a deduction (since they didn’t pay), but if structured under a Section 127 educational assistance plan, it’s also tax-free to the employee (up to $5,250/year). This is a win-win: the business invests in a more skilled workforce and gets a deduction, and the employee gets free education. On the flip side, if the employer doesn’t reimburse and the employee has to pay, the employee is stuck with the limitations we discussed (no federal deduction currently, possibly a state deduction or a credit).

Business vs. Hobby: A quick note – as illustrated in Dana’s photography example earlier – you must be engaged in an actual business (for profit) to deduct business education. The IRS defines a business vs. a hobby by looking at things like profit motive, frequency of activity, and record-keeping. If what you call “business education” is for something that isn’t clearly a business, the IRS could disallow the deduction. Always ensure you categorize your activity correctly.

Mixing Personal and Business Benefits: Many education experiences have both personal and professional benefits. The tax code doesn’t do split deductions well in this category – it’s usually black or white. If the education qualifies as business-related (maintains/improves skills in current job), you can deduct the whole cost (assuming you meet other criteria). If it doesn’t, you deduct none of it (though you might claim a credit if eligible). There isn’t a standard provision to, say, deduct 50% of an expense because “half was work-related and half was personal development.” So you have to honestly assess the primary purpose and outcome of the education. For instance, an executive taking an art history course for fun, which only tangentially might help with creativity at work, can’t allocate a portion to business – it’s purely personal in the IRS’s eyes.

In summary: Business education expenses are powerful deductions but live in a narrow lane. Personal education might enrich your life or lead to career growth in the long run, but you generally can’t expect a tax deduction for it unless it fits into the specific work-related framework or an education credit. Always categorize your education spending correctly, because misclassifying personal expenses as business expenses is a common trigger for IRS scrutiny.

Decoding Tax Jargon: Key Terms Explained

Taxes come with a lot of jargon. Here are some key terms related to deducting continuing education, in plain English:

Ordinary and Necessary: This is the standard from tax law (Section 162) for business expenses. Ordinary means common and accepted in your line of work. Necessary means helpful and appropriate for your business (it doesn’t have to be indispensable, but it should not be extravagant or irrelevant). For education, ask: Is this type of course something others in my field would normally take? Does it serve a legitimate work purpose? If yes, it’s likely ordinary and necessary.

Trade or Business: In this context, your current occupation or the business you’re actively involved in. You have to be “carrying on” a trade or business to deduct related expenses. Education must relate to the skills or requirements of that existing trade or business. If you’re not yet in a trade or business (e.g., a student or unemployed looking to enter a field), you don’t have a trade or business to deduct expenses against.

New Trade or Business: A completely different occupation or line of work that you weren’t already qualified in. The IRS uses this concept to deny deductions – if your education trains you for a new trade, it’s personal. What counts as new? Often obtaining a professional license or degree that leads to a new career (becoming a lawyer, doctor, pilot, teacher, etc., when you weren’t one before). Even a significant shift, like an engineer becoming a financial analyst, could be “new” if the education trains for that shift.

Minimum Educational Requirements: The baseline level of education or credential needed for your job. If you’re fulfilling that baseline, that education isn’t deductible. For example, a CPA firm might hire someone provided they complete a master’s degree or get their CPA license within a year – that education is meeting the minimum requirement for the job (nondeductible). Once you’ve met the minimum and are established, further education can be considered differently.

Form 2106 (Employee Business Expenses): This is the tax form employees use to claim unreimbursed work expenses (including education) when allowed. Currently, only certain categories of employees use it (reservists, performing artists, etc.). Pre-2018, many employees who itemized used to file Form 2106 to deduct expenses like training, travel, tools, etc. The form calculates the expense amount that would carry to Schedule A or Schedule 1.

Schedule C (Profit or Loss from Business): A form filed with your 1040 if you’re a sole proprietor or single-member LLC, where you report business income and expenses. Continuing education for a self-employed person goes here as a business expense. Think of Schedule C as your mini “income statement” for your business. If you take a course for your business, it finds a home on Schedule C.

Schedule A (Itemized Deductions): The form where individual taxpayers list itemized deductions (like mortgage interest, state taxes, charitable contributions). Before 2018, unreimbursed job expenses (including work education) went here in a section called “Job Expenses and Certain Miscellaneous Deductions,” subject to that 2% of AGI floor. That whole section is suspended until 2026 for most folks. Schedule A is still used for things like medical expenses, but work education won’t appear here unless you’re in the narrow exception group (e.g., impairment-related expenses, which do go on Schedule A and are not subject to the 2% floor).

Schedule 1 (Adjustments to Income): This form accompanies the 1040 and lists above-the-line adjustments. Certain people (like qualified performing artists, reservists, etc.) can take an adjustment for work expenses including education. The amount from Form 2106 (for those special employees) actually appears on Schedule 1, reducing gross income directly. Schedule 1 is also where the self-employed health insurance deduction, student loan interest, and other adjustments show up.

Lifetime Learning Credit (LLC): A valuable education tax credit (different from a deduction). It’s up to $2,000 per year (20% of up to $10,000 in tuition/fees) for post-secondary courses – available to working adults going back to school, grad students, etc. Importantly, it covers courses taken to acquire or improve job skills (which sounds like continuing ed), but it has nothing to do with whether the course is deductible as a business expense. It’s based on paying tuition to an eligible institution and your income level. You can claim the LLC for many work-related courses (as long as they’re at a qualifying institution) even if you can’t deduct them – but again, no double-dipping with a deduction.

American Opportunity Credit (AOTC): Another education credit, but mainly for the first four years of undergraduate education. It’s unlikely to overlap with “continuing education” in a professional context, since AOTC is for degree candidates in undergrad. It’s worth mentioning because some people confuse education benefits. For continuing ed (like a mid-career course or grad courses), the Lifetime Learning Credit is the usual credit.

Section 127 Plan: This refers to the employer-provided educational assistance program. Under Section 127 of the tax code, employers can pay up to $5,250 per year for an employee’s education (undergrad, grad, workshops, etc., job-related or not) and the employee doesn’t have to pay tax on that benefit. It’s a way companies encourage continuing education. If your work offers this, you don’t get a deduction (since you’re not paying the cost), but it’s a significant tax-free perk. Anything above $5,250 would usually get added to your W-2 income (unless it’s job-required training which might be treated differently).

Impairment-Related Work Expenses: These are expenses a disabled person incurs to work (e.g., special education, equipment, or training needed because of the impairment). They are deductible as itemized deductions and are not subject to the 2% threshold. For instance, if a worker had to get special training to use adaptive technology after a disability, that could be counted here.

Section 274 (Travel Substantiation): While not specific to education, if you deduct travel for attending an education program, Section 274 rules require you to substantiate (prove) the expenses – have receipts, show the primary purpose was business, etc. Just a reminder that normal business expense rules (keeping documentation, proving business purpose) apply fully to education costs as well.

Schedule E (for certain incomes): Not directly about continuing ed, but if your education expense relates to managing rental properties or other income on Schedule E, you might wonder where to deduct. Generally, you’d still use the criteria and possibly deduct on Schedule E if the expense is tied to that income (though this is less common – e.g., a landlord taking a class on property management could arguably deduct it against rental income on Schedule E).

Understanding these terms helps you navigate the conversation around education expenses. In practice, you don’t necessarily need to cite code sections on your return, but knowing them ensures you’re within the lines. For example, knowing what “qualifies for a new trade or business” means can save you from claiming something you shouldn’t. And if a CPA mentions Section 162 or Form 2106, you’ll know they’re talking about the backbone of why an expense is or isn’t deductible and the mechanism to claim it.

State-by-State: Continuing Education Deductions on State Taxes

State tax laws sometimes throw a curveball: a few states allow deductions for work-related education (and other unreimbursed employee expenses) even when federal law does not. Here’s a snapshot:

State	State Tax Treatment of Continuing Education
Alabama	Yes – Alabama lets you deduct unreimbursed employee business expenses (including job-related education) on your state return if you itemize for state purposes. The state essentially still follows the old federal rules, so expenses that were deductible pre-2018 can be deducted on Alabama Schedule A.
Arkansas	Yes – Arkansas is another state that permits itemized deductions for unreimbursed employee expenses. A work-related course or license renewal fee can be written off on the Arkansas return if you itemize, giving employees some relief at the state level.
California	Yes – California did not conform to the federal suspension of miscellaneous itemized deductions. That means a California taxpayer can claim unreimbursed job expenses (including qualifying continuing education) on their state Schedule CA. It’s subject to similar 2% of AGI limits that the federal law had. So, an employee who can’t deduct a $1,000 training on their federal 1040 might still deduct it on their California Form 540 if they have enough itemized deductions.
Hawaii	Yes – Hawaii also allows unreimbursed employee business expenses as an itemized deduction. The rules mirror the old federal approach, so work education costs can count if you itemize in Hawaii. As with others, you need sufficient total itemized deductions to benefit.
Minnesota	Yes – Minnesota provides a state tax break for unreimbursed employee expenses. While the federal itemized deduction is gone, Minnesota taxpayers can still list those expenses on their state return. Continuing education that’s ordinary and necessary for your job can be deducted for Minnesota taxes if you itemize.
New York	Yes – New York allows the deduction of unreimbursed employee business expenses on the state return. New York’s itemized deductions start with your federal amount, but they add back deductions that the feds disallowed under TCJA. So, a New Yorker who paid out-of-pocket for continuing ed can include that expense in their New York Itemized Deduction calculation, even though the federal itemized is zero.
Pennsylvania	Yes – Pennsylvania takes a unique approach: it allows unreimbursed employee business expenses (including job training costs) as an adjustment against compensation on the PA tax return. In PA, if you’re an employee who had to pay for required continuing education or license fees to keep your job, you can deduct those directly from your wage income on the state form. Pennsylvania has strict rules and forms (like PA Schedule UE) to detail these expenses, but it means employees get a state-level deduction for education that maintains their skills or is required for employment.
Other States	No (generally) – The majority of states follow federal law on itemized deductions. If the IRS says you can’t deduct unreimbursed education costs (2018–2025), these states won’t let you deduct them either. However, always check your specific state’s rules – some states have their own credits or adjustments for education (for example, a state might have a credit for teachers’ continuing education or special programs). The states listed above are notable exceptions where the old deduction lives on.

Note: Even in states that allow these deductions, you often must be itemizing your deductions (instead of taking a standard deduction) to benefit. And the expenses usually have to qualify under the same type of rules the IRS used to have – meaning the education must be work-related by the IRS definition. It’s not a free-for-all; the state is basically giving you what the federal law used to.

What this means in practice: Let’s say you’re an employee in California who spent $2,000 on continuing education required to maintain a certification for your job. Federally, in 2025, you cannot deduct this $2,000. But on your California state income tax return, you could include that $2,000 as an itemized deduction (subject to the 2% rule). If you have enough deductions, it could lower your CA taxable income. This softens the blow of the federal disallowance a bit.

Always check the latest state tax forms or consult a CPA in your state – state laws can change, and some states might enact new provisions or sunset old ones. But as of now, the states listed give a nod to those unreimbursed education costs that the IRS is ignoring.

Pros and Cons of Deducting Continuing Education

Is claiming a deduction for your continuing education always a good idea? Here are the upsides and downsides:

Pros	Cons
Tax Savings: Lowers your taxable income, which can save you money (especially if you’re in a high tax bracket or the expense is large).	Strict Criteria: The IRS rules are strict – many education costs won’t qualify. If you misclassify a personal or new-career expense as deductible, you risk an audit or penalties.
Encourages Professional Growth: Essentially gets the government to subsidize part of your learning. You can reinvest in your career knowing some costs come back at tax time.	Limited for Employees: Most W-2 employees currently get no federal deduction for unreimbursed education (2018–2025). You might go through the trouble of tracking expenses only to find they’re not deductible federally.
Full Deduction for Self-Employed: If you qualify, every dollar spent on valid continuing ed directly reduces self-employment or business income – there’s no floor or phase-out.	Itemizing & Thresholds: When employee deductions return, they’ll be an itemized deduction subject to a 2% AGI threshold. Many people won’t itemize or have enough expenses to exceed that, limiting the benefit.
Keeps You Competitive: Indirect benefit – taking the deduction might make it more financially feasible to attend conferences or courses, helping you stay ahead in your field (and possibly earn more).	Record-Keeping: You need good documentation – receipts, proof that the course was related to your job, etc. It’s extra work to substantiate the deduction in case the IRS asks.
State Tax Breaks: Even if the feds disallow it, in certain states you can still get a tax benefit, which is better than nothing.	Alternative Credits: Sometimes a deduction isn’t the best benefit – you might be better off with a credit (LLC) or an employer paying. If you deduct when a credit was more valuable, you lose out.

In short, the pros of deducting continuing education are clear if you can do it: it can make learning cheaper after-tax and encourage you to invest in yourself. But the cons highlight that not everyone can take advantage (especially employees right now), and you have to be careful to only claim what you’re entitled to. It’s not an automatic freebie for every class you sign up for.

FAQ: Your Continuing Education Deduction Questions Answered

Q: Can a dentist deduct continuing education expenses?
A: Yes. A self-employed or practice-owner dentist can deduct required continuing education courses and license fees as business expenses. (W-2 employee dentists generally can’t deduct these under current federal rules.)

Q: Can I deduct courses I paid for as a W-2 employee?
A: No. For 2018–2025, unreimbursed job education expenses aren’t deductible on federal returns for employees (unless you’re in a special category). You might get a break on your state return or via an education credit.

Q: Is MBA tuition deductible if I’m working full-time?
A: Yes – if it enhances skills in your current field and doesn’t qualify you for a new profession. Otherwise, no.

Q: Can you write off private pilot training expenses on taxes?
A: No. Training to obtain a new pilot’s license isn’t deductible because it qualifies you for a new profession.

Q: If my employer reimbursed my tuition, can I deduct it?
A: No. You can’t deduct education expenses that were paid or reimbursed by your employer (and not taxed to you).

Q: Can I claim an education credit and a deduction for the same course?
A: No. You must choose one tax benefit per expense – either a deduction or a credit, but not both.

Q: Will the education deduction for employees come back after 2025?
A: Yes. Under current law, the unreimbursed employee education expense deduction is set to return in 2026 (when the Tax Cuts and Jobs Act provisions expire), unless Congress extends the ban.