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Education Tax Topics

Lifetime Learning Credit

What is the Lifetime Learning Credit, how do you qualify for it, and what expenses does it apply to?

If you paid educational expenses for yourself, your spouse, or a dependent this year, you may be able to reduce your taxes by claiming the Lifetime Learning Credit. This nonrefundable credit can reduce your taxes by up to $2,000. The credit is 20% of the first $10,000 a family pays for tuition and fees for continuing education beyond high school.

Can I claim the Lifetime Learning Credit?

This credit is based on the total spent for the family and allows a credit for as little as one class, for students not enrolled in a degree or certificate program, even for graduate programs.

There are no minimum number of course credits or hours for you to qualify.

Which expenses qualify for the Lifetime Learning Credit? 

The expenses that qualify for the Lifetime Learning Credit include those “necessary and required” to complete courses at a post-secondary school. This includes the following; 

  • 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).

To claim the full credit, your modified Adjusted Gross Income (AGI) must be $80,000 or less, and $160,000 or less if you and your spouse are filing a joint return. You can claim a smaller percentage of the credit if your individual income is between $80,000 and $90,000, or $160,000 and $180,000 for joint filers. 

Tip/Help

Remember that the Lifetime Learning Credit reduces the amount of taxes that you owe, not your taxable income. 

Are there income limits?

To claim the full credit, your modified Adjusted Gross Income (AGI) must be $80,000 or less as an individual, or $160,000 or less if you and your spouse are filing a joint return.

Is the credit refundable?

The Lifetime Learning Credit is a nonrefundable credit and reduces the amount of income tax you owe. Any credit remaining after your tax bill is satisfied is not refundable.

Lifetime Learning Credit vs. American Opportunity Credit

The tuition and fees deduction has been permanently expired and the Lifetime Learning Credit income limits are the same as the American Opportunity Credit. The American Opportunity Credit is only available for the first four years of college and the student must be working towards a degree or certificate at least half-time or better at an accredited institution. The Lifetime Learning Credit is available for any student regardless of how many classes taken at a time.  You can use the Lifetime Learning Credit for all post graduate courses. Taxpayers may be eligible for the Lifetime Learning Credit if they don’t qualify for the American Opportunity Credit.

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