There are two credits available to individuals that qualify to claim a credit or deduction for qualified education expenses paid during the tax year. In tax years prior to 2018, a deduction is also available. You may claim only one on your tax return for each student. The same expenses may not be used to claim more than one credit/deduction.
The American Opportunity Credit:
- Maximum credit of $2,500 per eligible student
- 40% refundable / 60% nonrefundable
- Modified Adjusted Gross Income Limits: $180,000 Married Filing Jointly / $90,000 Single
- Available for 4 years only; only available if the first four years of post-secondary school not completed before the current tax year
- Student must be pursuing an undergraduate degree and be enrolled at least half-time
- No felony drug convictions
The Lifetime Learning Credit:
- Maximum credit of $2,000 per return
- Nonrefundable credit (reduces tax owed; does not increase refund)
- Modified Adjusted Gross Income Limits: $136,000 Married Filing Jointly / $68,000 Single
- Available for all years of post-secondary education for unlimited number of years
- Student does not need to be pursuing a degree; not required to be enrolled half-time
Tuition and Fees Deduction: (Tax Year 2017 and prior- Not allowed for tax years after 2017)
- Maximum benefit: Reduces taxable income by $4,000
- Nonrefundable; reduces taxable income
- Modified Adjusted Gross Income Limits: $160,000 Married Filing Jointly / $80,000 Single
- Available for all years of post-secondary education for unlimited number of years
- Student must be enrolled at eligible institution for at least one course
