If you paid qualifying higher education expenses during the tax year, you may be eligible for an education tax credit. These credits can reduce the amount of federal income tax you owe and, in some cases, increase your refund.
For tax year 2026 (returns filed in 2027), taxpayers generally must receive a Form 1098-T, Tuition Statement, from an eligible educational institution that includes a valid Employer Identification Number (EIN) to claim an education credit. Eligible institutions may be located in the United States or abroad.
The two available education credits are:
- American Opportunity Tax Credit (AOTC)
- Lifetime Learning Credit (LLC)
Who Can Claim the American Opportunity Tax Credit?
Generally, you may qualify for the American Opportunity Tax Credit if all of the following apply:
- You paid qualified higher education expenses.
- The expenses were paid for an eligible student.
- The student is:
- You,
- Your spouse, or
- A dependent claimed on your tax return.
The American Opportunity Credit is typically available for students working toward a degree or other recognized educational credential and can provide a larger tax benefit than the Lifetime Learning Credit for eligible undergraduate students.
Who Can Claim the Lifetime Learning Credit?
Generally, you may qualify for the Lifetime Learning Credit if all of the following apply:
- You paid qualified higher education expenses.
- The expenses were paid for an eligible student.
- The student is:
- You,
- Your spouse, or
- A dependent claimed on your tax return.
Unlike the American Opportunity Credit, the Lifetime Learning Credit may be available for undergraduate, graduate, professional degree, and certain continuing education courses that improve or acquire job skills.
Can I Claim Both Education Credits?
No. You cannot claim both the American Opportunity Credit and the Lifetime Learning Credit for the same student in the same tax year.
For each student, you must choose one credit:
- If you qualify for both credits for the same student, you may claim either the American Opportunity Credit or the Lifetime Learning Credit.
- You cannot claim both credits for that student on the same return.
- Different students on the same return may qualify for different credits.
Example: If you claim the Lifetime Learning Credit for your dependent in 2026, you cannot also claim the American Opportunity Credit for that same dependent for 2026.
What If I Didn't Receive Form 1098-T?
You may still be eligible to claim an education credit in certain situations when an educational institution is not required to issue Form 1098-T.
Common examples include:
- The student is a qualified nonresident alien.
- All qualified education expenses were paid entirely with scholarships or grants.
- Expenses were paid through a formal billing arrangement between the institution and another organization.
- The student was enrolled only in courses for which no academic credit was awarded.
Even in these situations, you must still meet all other requirements for the education credit being claimed.
Important: A Valid EIN Is Required
A valid Employer Identification Number (EIN) for the educational institution is required within the software to claim an education credit.
Be sure to review your Form 1098-T and verify that the school's EIN is included before completing Form 8863.
Additional Information
For more detailed guidance on education tax benefits, eligibility rules, qualified expenses, and income limitations, see IRS Publication 970, Tax Benefits for Education.