Many families hosting J-1 exchange students may not be aware that if they itemize their taxes, they can claim a deduction of up to $50/month for each month the exchange student lived in the family’s home. This deduction should be included in the charitable contribution section of one’s tax return. Key elements of this deduction are:
- The student must have been in the home for most of the month; if it was only a week, don’t claim it!
- For two students, a taxpayer can claim two deductions.
- If the student was in your home for over two calendar years, the deduction is taken over two tax years. That means for 2015, a taxpayer would list the months during 2015 that the exchange student lived in the home. Next year, the taxpayer would be able to claim the 2016 portion.
- Taxpayers do not need a letter of confirmation from their exchange program to claim the deduction. However, If you want a confirmation letter, the organization with which you work should be willing to give you one.
Please note: we are not giving you any legal tax advice on this. We’re just providing information because we know from experience that many families are not aware that the deduction is available. Talk to your accountant and to your exchange program for more information. You can also review the IRS publication that explains it all: IRS Pub 526.