There are two credits available to individuals that qualify to claim a credit or deduction for qualified education expenses paid during the tax year. A deduction for tuition and fees 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: (Now allowable 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
