Short State Income Tax Forms Fail To Mention Deduction

COLUMBUS, Ohio (AP) - The TeleFile income-tax form booklets mailed by the state to 54 percent of Ohio taxpayers failed to mention a major deduction for college students or their parents, a newspaper reported.

The booklets for TeleFile users, who are able to file returns by telephone, make no reference to a $2,500 tuition deduction this year for college freshmen and sophomores, The Columbus Dispatch reported in its Wednesday's editions.

The regular IT-1040 booklets contained that information. The deduction is included in large lettering on the front page of the IT-1040 books.

To claim the deduction, taxpayers must file the IT-1040 form.

"It was an oversight," said Ohio Department of Taxation spokesman Gary Gudmundson. "In hindsight, we wished that were in there."

The higher-education deduction could affect 300,000 Ohio students and cost the state $23.8 million in revenues this year.

Taxpayers can save up to $148 per student.

The omission of the tuition deduction was not an attempt to keep taxpayers in the dark to help bolster revenues, Gudmundson said.

"It was strictly a system of developing forms and instructions that did not catch this one," he said.

The new tuition deduction has a maximum value of $5,000 per student for two years and cannot be applied to tuition financed by tax-free sources, such as scholarships, Veterans Administration educational benefits or employer reimbursement.

Part-time students can claim the full deduction over a five-year period, but only if they are freshmen or sophomores.

Students must attend Ohio schools, and taxpayers must be state residents with gross incomes of less than $50,000 for individual filers or $100,000 for married couples filing joint returns.

(Copyright 2002 by The Associated Press. All Rights Reserved.)