According to the IRS, if you host a foreign exchange student, you may be able to deduct up to $50 in qualifying expenses per month for maintaining the student.
What are the requirements?
- must be in the 12th or a lower grade at a U.S. school and must attend school full-time,
- must live in the taxpayer's home under a written agreement between the taxpayer and a “qualified organization” (see below) as part of the organization's program to provide the student with educational opportunities, and
- cannot be the taxpayer's dependent or relative.
The deduction is available only to exchange student arrangements made through an organization that qualifies as a:
- nonprofit community chest, corporation, trust, fund, or foundation operated solely for religious, charitable, educational, scientific, or literary purposes or to prevent cruelty to animals or children or foster national or international amateur sports competition;
- war veterans' organization; or
- domestic fraternal society.
What expenses can I deduct?
The amount you can deduct includes:
- the cost of books
- medical and dental care
- entertainment, and
- other amounts spent for the student's well-being
What can't I deduct?
If you receive reimbursement for any part of the cost of having the student live with you, you are ineligible for the deduction. If you participate in a mutual exchange program under which you host a student in return for your child living with a family in a foreign country, you are ineligible for the deduction.
You cannot claim:
- depreciation for your home
- the fair market value of lodging
- general household expenses, such as taxes, insurance, and repairs
Where can I report my deduction?
The deduction is an itemized deduction reported as a charitable contribution.
- Federal Section
- Itemized Deductions
- Gifts to Charity
- Non Cash Donations (more than $500) if claiming more than $500
- Non- Cash Gifts to Charity (if claiming less than $500)
If you claim amounts paid for a student who lives with you, you will need to print and mail the return. Include the following information with your return:
- A copy of your agreement with the organization sponsoring the student placed in your household
- A summary of the various items you paid to maintain the student, and
- A statement that gives:
a. The date the student became a member of your household,
b. The dates of his or her full-time attendance at school, and
c. The name and location of the school