It is not a refundable credit, like the AOC. This means it can only bring your tax liability to zero. There are also income limits.
You are eligible to claim the Lifetime Learning Credit if all
of the following requirements are met:
- You (or your dependent or a third party) paid qualified education
expenses for higher education.
- You paid the education expenses for an eligible student.
- The eligible student is you, your spouse, or a dependent you claim
an exemption for on your tax return.
- Your modified adjusted gross income is less than $67,000($134,000
if you are married filing jointly).
- The credit is reduced between $57,000 and $67,000 ($114,000 and
$134,000 MFJ).
To qualify, students must
attend an eligible institution. Almost all accredited public, nonprofit and
for-profit postsecondary schools (including many trade schools) fit this
description. To make sure a school is eligible, go to fafsa.gov and verify that it has a
Federal School Code..Calculating your credit
You can include the cost of
tuition, fees and any books or supplies you are required to purchase directly
from the school if it's a condition of enrollment. Therefore, if your professor
recommends that you purchase a textbook even though you can still enroll in the
class without one, then you cannot include the cost of the textbook in the
credit. The
maximum credit you can claim is 20 percent of up to $10,000 in eligible costs
or $2,000. It can credit 20% of your tuition.
It is limited by your tax liability.
