Individuals who pay qualified education expenses during the tax year may be eligible to claim one of two education-related tax credits. Only one credit may be claimed per student per year, and the same expenses cannot be used to claim more than one credit or deduction.
American Opportunity Credit (AOC)
- Maximum Credit: Up to $2,500 per eligible student
- Refundability: 40% refundable (up to $1,000), 60% nonrefundable
- MAGI Limits:
- $180,000 for Married Filing Jointly
- $90,000 for Single
- Eligibility:
- Available for up to 4 tax years per student
- Student must be pursuing an undergraduate degree
- Must be enrolled at least half-time
- Student must not have completed the first four years of post-secondary education before the current tax year
- No felony drug convictions
Lifetime Learning Credit (LLC)
- Maximum Credit: Up to $2,000 per tax return
- Refundability: Nonrefundable (reduces tax liability only)
- MAGI Limits:
- $180,000 for Married Filing Jointly
- $90,000 for Single
- Eligibility:
- Available for all years of post-secondary education
- No limit on the number of years the credit can be claimed
- Student does not need to be pursuing a degree
- Enrollment at least half-time is not required