Lifetime Learning Credit: eligibility, income limits and how to claim 

What is the Lifetime Learning Credit? 

The Lifetime Learning Credit (LLC) is a tax credit for students or their families paying for educational expenses, like tuition, fees, required books, equipment, and more, for education and training beyond high school.

If you are a student paying for your own educational expenses, or you pay for your spouse’s or child’s educational expenses, you may qualify for the LLC, which could mean less tax when you file.

How much is the Lifetime Learning Credit worth?

The LLC is worth up to 20% of the first $10,000 you spend on eligible higher education expenses, up to a $2,000 credit total per return for 2026.

Take note that the LLC is a non-refundable tax credit. That means it lowers your tax directly but won’t result in a bigger refund if any credit remains after zeroing out your tax.

Lifetime Learning Credit income limits 

The IRS phases out the LLC at certain income levels. If your modified adjusted gross income (MAGI) is above these thresholds, you may get a smaller credit or may not qualify at all.

For 2026, the IRS starts phasing out the LLC at a MAGI of $80,000 for single filers and $160,000 for joint filers and completely phases out the LLC at a MAGI of $90,000 for single filers and $180,000 for joint filers.

Who qualifies for the Lifetime Learning Credit? 

You may qualify for the LLC if:

• You paid for eligible higher education expenses for yourself, your spouse, or a dependent you claim on your tax return.
• You are not a dependent yourself (no one else is claiming you as a dependent on their tax return).
• You and the student both have valid Social Security numbers (SSNs) that were issued before your tax return is due (April 15, 2027, for 2026 returns). If you have an Individual Taxpayer Identification Number or an Adoption Taxpayer Identification Number, you do not qualify.
• You are not filing as married filing separately. The LLC is not available for this filing status.
• Your MAGI falls below the IRS limits ($90,000 for single filers or $180,000 for joint filers for 2026)
• Your student dependent is enrolled in a course to earn an undergraduate, graduate, or professional degree, or is taking courses to acquire or improve job skills.
• Your student dependent is attending a school or program eligible for a U.S. Department of Education student aid program (this applies to almost all accredited universities, colleges, and vocational schools)

What expenses qualify for the Lifetime Learning Credit? 

The expenses that qualify for the LLC include those that are necessary and required to enroll in courses at a qualified post-secondary school. Tuition and some related expenses are typically reported to you from the education institution on Form 1098-T, Tuition Expenses. Qualifying expenses include: 

• Tuition and required fees paid
• Cost of required books and materials
• Certain equipment required for the course of study (such as dental equipment for a dental student)

Take note that the IRS requires that you purchase books, materials, and equipment directly from the school or program to qualify for the LLC.

How to calculate the Lifetime Learning Credit

First, add up your eligible education expenses (up to $10,000), then calculate 20% of that total. If your MAGI falls below the IRS’s phase-out limit, your job is done.

If your MAGI falls within the phase-out range ($80,000 - $90,000 for single filers and $160,000 - $180,000 for joint filers) you’ll need to find your reduced credit amount using these steps:

1. Subtract $80,000 (or $160,000 if filing jointly) from your MAGI.
2. Divide that number by $10,000 (or $20,000 if filing jointly), which is the width of the phase-out range.
3. Multiply that number by 100, then subtract it from 100% to find the percentage of the LLC you can claim.
4. Multiply your pre-phase-out LLC amount (maximum of $10,000) by the percent you can claim.

Here’s an example:

Let’s say you’re a single filer with $8,000 in eligible education expenses and a MAGI of $86,000.

1. Calculate your pre-phase out LLC.

   Multiply your total eligible expenses by 20%:

   $8,000 x 0.2 = $1,600

2. Calculate the percentage you can claim.

   Subtract the starting phase-out limit from your MAGI:

   $86,000 - $80,000 = $6,000

   Divide that number by the total phase-out range:

   $6,000 ÷ $10,000 = 0.6

   Multiple that by 100:

   0.6 x 100 = 60%

   Subtract that from 100%:

   100% – 60% = 40%

3. Calculate your total LLC.

   Multiply your pre-phaseout LLC by the percentage you can claim:

   $1,600 x 0.4 = $640 eligible LLC

How to claim the Lifetime Learning Credit

Claim the LLC by completing and filing Form 8863, Education Credits. To do so, you’ll need your SSN and the student’s SSN, and your total credit amount. Then, transfer your credit to your Form 1040, U.S. Individual Income Tax Return.

Make sure you keep good records of all your eligible education expenses, including receipts and statements from the school, the dates the student is enrolled, etc.

Lifetime Learning Credit vs. American Opportunity Tax Credit

Both the LLC and the American Opportunity Tax Credit (AOTC) are valuable tax credits for eligible students that can help reduce your tax. They are also subject to the same MAGI phase-out limits discussed earlier. However, there are a few important key differences to keep in mind:

It’s important to note that you cannot claim both the LLC and the AOTC for the same student at the same time. Work with a Tax Pro to help you determine which education credit is the best option for your situation.

Get help claiming education tax credits 

Education credits, like the LLC and the AOTC, can be a big help when it comes to education expenses, but figuring out what they cover, who qualifies, how to calculate them, and which one to choose can be complicated. The good news? Jackson Hewitt is open all year, and our Tax Pros are always ready to help. Find tax services near you, then walk in or book now.