How Many Times Can You Claim Lifetime Learning Credit

If y'all paid for college in the last year, you may be able to claim the American opportunity credit or lifetime learning credit, or the the tuition and fees deduction. The American opportunity credit is generally the most valuable education tax credit, if yous qualify.

You can claim these educational activity revenue enhancement credits and deductions fifty-fifty if you paid for school with a student loan. Parents can have advantage, too, and so long as they don't choose a married filing separately status. Here'due south what to know about each option.

American opportunity credit

How information technology works: You tin lower your tax pecker by upwards to $two,500 if y'all paid that much in undergraduate pedagogy expenses last year. The American opportunity tax credit lets you claim all of the first $two,000 you lot spent on tuition, school fees and books or supplies needed for coursework — only non living expenses or transportation — plus 25% of the next $2,000, for a total of $2,500.

Who can claim it: The American opportunity credit is specifically for undergraduate higher students and their parents. Y'all tin can claim the credit on your taxes for a maximum of iv years. Your parents will claim the credit if they paid for your education expenses, and you lot're listed equally a dependent on their render.

You can get the total educational activity tax credit if your modified adjusted gross income, or MAGI, was $80,000 or less in 2021 ($160,000 or less if yous file your taxes jointly with a spouse). If your MAGI was between $80,000 and $90,000 ($160,000 and $180,000 for joint filers), y'all'll terminate up with a reduced credit. If you earn more than that, you tin't claim this credit.

What it's worth: The American opportunity credit cuts the amount of taxes you pay. If you owe $3,000 in taxes and get the full $2,500 credit, for instance, you'll take to pay simply $500 to the IRS.

Is the American opportunity credit refundable? Yes. You can still receive twoscore% of the American opportunity tax credit'south value — up to $1,000 — even if y'all earned no income last twelvemonth or owe no tax. For example, if y'all qualified for a refund, this credit could increase the corporeality you'd receive past up to $1,000. That's why the American opportunity credit is typically the all-time didactics taxation break for students and their families.

Lifetime Learning Credit

How it works: You can claim 20% of the first $x,000 you lot paid toward 2021 tuition and fees, for a maximum of $ii,000. The lifetime learning credit doesn't count living expenses or transportation as eligible expenses .

Who can claim it: The lifetime learning credit isn't merely for undergrads or their parents. The credit applies to undergraduate, graduate and non-degree or vocational students, and there's no limit on the number of years y'all can merits it. So it's platonic for graduate students or anyone taking classes to develop new skills, fifty-fifty if you already claimed the American opportunity revenue enhancement credit on your taxes in the past. You can't claim both the American opportunity credit and the lifetime learning credit in the same yr.

What information technology's worth: Y'all can claim the credit if your MAGI was less than $59,000 ($118,000 if y'all filed jointly) terminal year. If your MAGI was between $59,000 and $69,000 ($118,000 to $138,000 if you filed jointly), yous tin can go a reduced credit. You tin can't get the credit if your MAGI was more than $69,000 ($138,000 if you're married and filing jointly).

Is the lifetime learning credit refundable? No. You cannot receive the lifetime learning credit as a refund if you earned no income or owe no tax.

The list is here.

See 2021'due south standout pupil loans and refinancing options. All backed by tons of nerdy research.

Education tax forms

In Jan your schoolhouse volition send you Form 1098-T, a tuition argument that shows the pedagogy expenses y'all paid for the year. You'll utilize that grade to enter the corresponding amounts on your tax return to claim an education revenue enhancement credit or deduction.

If you or your parents as well paid student loans , you may exist able to deduct student loan interest from your taxable income. If yous paid more than $600 in interest, your servicer volition automatically transport you Form 1098-Eastward. You can still deduct interest if yous paid less than $600, but you'll accept to ask your servicer for the class.

If your visitor provided funds for educational aid — similar tuition reimbursement or employer student loan repayment — up to $5,250 may non be counted as taxable income. Student loan payments must have been made after March 27, 2020 to be eligible.