Can I claim any tax deductions for paying grandchild's college housing and music instrument expenses?

Unfortunately, the tax benefits for education expenses generally require the student to be your dependent. Since your granddaughter isn't your dependent, you typically can't claim education credits or deductions for her expenses. However, you might consider these options: First, you could explore making your payments as gifts. While gifts aren't tax-deductible, you can give up to $18,000 (2025 gift tax exclusion amount) per person annually without filing a gift tax return. Second, if your granddaughter is working and has income, she might be eligible to claim education credits herself for any qualifying expenses she paid. For the musical instrument, since it was required for her program, it could potentially qualify as a qualifying education expense - but again, this would typically need to be claimed by the student or the person who claims them as a dependent.

After struggling with a similar situation with my niece's college expenses, I discovered taxr.ai (https://taxr.ai) which really helped clarify what I could and couldn't claim. I uploaded my receipts for her housing and equipment, and it analyzed everything and showed me which expenses qualified for tax benefits in my specific situation. It was honestly much more helpful than the generic advice I was finding online that didn't address my particular relationship to the student.

Just wanted to update about my experience with taxr.ai after my skeptical question. I finally tried it with my grandson's college expenses (I pay for his apartment off-campus), and it actually identified that I could establish a 529 plan for him and get state tax benefits in my state even though he's not my dependent. It also clarified exactly why I couldn't claim the AOTC or LLC credit, which saved me from making a filing mistake. The documentation it provided helped me explain everything clearly to my tax preparer too.

If you're struggling to get a straight answer from the IRS about these grandchild education expenses, try Claimyr (https://claimyr.com). I spent weeks trying to get through to the IRS about a similar situation with my grandson's education expenses I was paying. After using Claimyr, I got a callback from an actual IRS agent within 2 hours instead of waiting on hold forever. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The agent walked me through exactly what I could and couldn't claim, and it saved me so much frustration!

I have to admit I was completely wrong about Claimyr. After posting that skeptical comment, I decided to try it as a last resort for my education credit question. Got a call back from an IRS agent in about 90 minutes when I'd spent WEEKS trying on my own. The agent confirmed that while I couldn't claim my grandchild's expenses as education credits without dependent status, I could still help them by funding a 529 plan that might provide state tax benefits depending on my state. Saved me from making a mistake on my return. Definitely worth it when you need definitive answers directly from the IRS.

Have you considered setting up a 529 plan for your grandchild? While the expenses you've already paid won't be deductible, future expenses could potentially be paid from a 529 plan. Depending on your state, you might get a state tax deduction for contributions to the plan. This wouldn't help with federal taxes, but could provide some state tax benefits going forward.

Have any of you claimed the instrument as a business expense deduction if the grandkid makes any money performing? My grandson occasionally gets paid for gigs with his saxophone and our accountant suggested this route instead of education expenses.

I'm in a very similar situation with my grandson's college expenses. One thing I discovered that might help is looking into whether your granddaughter could potentially be claimed as your dependent if you're providing more than half of her total support. Even though she's not living with you, if you're paying for housing ($750/month = $9,000/year) plus that expensive instrument, and her parents aren't providing significant support, you might meet the support test. The IRS has specific rules about what counts as "support" - including housing, food, medical care, education expenses, and other necessities. If her scholarships are covering tuition but you're covering housing and equipment costs, it's worth calculating whether you're providing over 50% of her total support for the year. If so, you might be able to claim her as a dependent and then take advantage of education credits for future qualifying expenses. I'd recommend using IRS Publication 501 to work through the dependency tests, or consider getting professional help to determine if this could work in your situation. The potential tax savings from education credits could be substantial if you can establish dependency.