Tax Credits for Higher Education

If you or any of your dependents are enrolled in a higher education program this fall, you may qualify to claim one or more credits on your 2019 tax return.

The American Opportunity Tax Credit (AOTC) is a credit of up to $2,500 for a student pursuing a degree or certified credential at a college or vocational school. You may claim the credit for up to four years for each qualifying student, and you may claim multiple AOTCs if you have more than one student in your household. The AOTC is partially refundable, meaning that if your tax is reduced below zero, up to $1,000 of the credit may be refunded to you. Generally, a taxpayer whose modified adjusted gross income is $80,000 or less ($160,000 or less for joint filers) can claim the AOTC credit for the qualified expenses of an eligible student

The Lifetime Learning Credit (LLC) is available for household members enrolled in one or more courses at a higher learning institution, or in a qualifying course to develop or improve professional skills. A maximum nonrefundable credit of $2,000 (regardless of the number of qualifying students) may be claimed per year, for any number of years. The Lifetime Learning Credit applies to 20% of the first $10,000 of a taxpayer’s out-of-pocket expenses for all students attending an institution of higher education.

Both credits are subject to income limits and other eligibility restrictions. A qualified tax advisor can help you determine your eligibility for both credits.