This credit, originally created under the American Recovery and Reinvestment Act, has been extended through 2019.
The credit can be up to $2,500 per eligible student and is available for the first four years of post secondary education.
Forty percent of this credit is refundable, which means that you may be able to receive up to $1,000, even if you owe no taxes. The full credit is generally available to eligible taxpayers whose modified adjusted gross income is below $90,000 ($180,000 for married couples filing a joint return).
Qualified expenses include tuition and fees, course related books, supplies and equipment.
Reduce the qualified educational expenses by the amount of tax-free education assistance allocated to that academic period. (Ex. the tax-free parts of scholarship/fellowship grants, tax-free part of Pell Grants, employer-provided educational assistance, Veterans' educational assistance, any other nontaxable payments other than gifts or inheritance received as educational assistance).
For more information, please see IRS Publication 970.