You can take either a refundable credit or an itemized deduction for allowable college tuition expenses. The expenses must be for undergraduate study, paid by you (as a resident taxpayer) on behalf of yourself, your spouse, or dependents to enroll or attend qualifying in- or out-of-state institutions of higher education.

The maximum amount of allowable college tuition expenses is $10,000. For taxpayers with allowable expenses of $5,000 or more, the credit equals the applicable percentage of allowed tuition expenses multiplied by 4 percent. Taxpayers with expenses of less than $5,000 may claim a credit equal to the lesser of the applicable percentage of allowed tuition expenses or $200. The itemized deduction equals the applicable percentage of allowed tuition expenses in a given year.

Qualifying tuition expenses are defined as net of scholarships or financial aid. Institutions of higher education include business, trade, technical or other occupational schools, recognized and approved by the Regents of the University of the State of New York, or a nationally recognized accrediting agency accepted by the Regents, which provides a course of study leading to the granting of a postsecondary degree, certificate or diploma.

The Federal government also offers tax credits and deductions in the form of the Hope Scholarship Credit, the Lifetime Learning Credit, and the Education Loan Interest Deduction.