The Lifetime Learning Credit may be claimed for the same expenses made on or after January 1, Payments made in for periods of attendance that begin in January-March of may be claimed only on the Tax Return.
The American Opportunity Tax Credit may be claimed for a student who 1 is enrolled in 6 credits or more, 2 is in one of the first four years of post-secondary education, 3 is enrolled in a program leading to a degree or certificate, and 4 is free of any conviction for a Federal or State felony offense consisting of the possession or distribution of a controlled substance. For the Lifetime Learning Credit students are not required to be enrolled in 6 credits or more and are not required to be enrolled in the first two years of post-secondary education.
Nonresident aliens generally are not eligible for either tax credit. You can claim the tax credit for all four years of higher education as long as you have not claimed the AOTC or the former Hope credit for more than four tax years.
The amount a taxpayer may claim is gradually reduced for taxpayers who have modified adjusted gross income above a specified amount. The schools determine the academic periods. For schools that use clock or credit hours and do not have academic terms, the payment period may be treated as an academic period.
To be eligible to claim the AOTC or the lifetime learning credit LLC , the law requires a taxpayer or a dependent to have received Form T, Tuition Statement, from an eligible educational institution, whether domestic or foreign. This statement helps you figure your credit. The form will have an amount in box 1 to show the amounts received during the year.
But this amount may not be the amount you can claim. Unlike the other education tax credits, the American opportunity tax credit includes expenses for course-related books, supplies and equipment that are not necessarily paid to the educational institution.
It also differs from the Hope scholarship credit because it allows the credit to be claimed for four years of post-secondary education instead of two.
This means you can get it even if you owe no tax. In general, qualified expenses for the education tax credits include tuition and required fees for the enrollment or attendance at an eligible post-secondary educational institution.
To be creditable, the expenses paid during a taxable year must relate to: 1 an academic period that begins in the same taxable year; or 2 an academic period that begins in the first three months of the following taxable year. For the American opportunity tax credit, qualified expenses have been expanded to include expenditures for course materials, as well as tuition and required fees. For this purpose, the term "course materials" means books, supplies and equipment needed for a course of study whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance.
The student should receive a Form T from the educational institution that the student attended. If the student does not receive a Form T, the student should contact the educational institution and request the form.
Whether an expenditure for a computer qualifies for the credit depends on the facts. An expenditure for a computer would qualify for the credit if the computer is needed as a condition of enrollment or attendance at the educational institution. You will be able to reduce your tax liability by one dollar for each dollar of credit for which you're eligible. It is the taxpayer's adjusted gross income increased by foreign income that was excluded, and by income excluded from sources in Puerto Rico or certain U.
You cannot claim the tuition and fees tax deduction in the same taxable year that you claim the American opportunity tax credit or the Lifetime Learning credit. You must choose between taking an education tax credit or taking the deduction for tuition and fees.
You also cannot claim the tuition and fees tax deduction if anyone else claims the American opportunity tax credit or the Lifetime Learning credit for you in the same taxable year. Although the credit will usually result in greater tax savings, taxpayers should calculate both the tax credit and the deduction on the tax return to see which is most beneficial. Often, tax software will automatically compare the tax result, from taking the education credit or taking the deduction, for you.
AOTC is a tax credit for qualified education expenses. Program Contact Managing Agency U. Department of the Treasury. Check if you may be eligible for this benefit. Expand Quick Info Section. Financial Assistance. How can I contact someone? Receive an email when this benefit page is updated:. Other Benefits People Viewed.
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