What Payments for education and training from Veterans affairs do i claim?

[Vanessa A]

You do not claim VA payments for education or training from the Veteran's Affairs as income on your return.  These benefits are tax free.

On the flip side, since you are not including them in your income, you cannot take any type of education credits for the payments made by the VA for education. This would be considered double dipping (getting a benefit for something you didn't pay for with taxable income) which is not allowed.

If the VA benefits only covered a portion of your education expenses, you may still be able to claim a credit for the amount you paid, that was NOT covered by the VA. 

Example, 

Your Tuition is $20,000

The VA paid $10,000

You can claim the remaining $10,000 for an education credit if otherwise eligible. 

 Lifetime Learning Credit

• You can take this for an unlimited number of years
• Twenty percent of expenses up to $10,000 (Maximum credit is $2,000)
• Non-Refundable meaning this can reduce the amount of taxes you owe, but if your tax liability is less than the LLC, your tax will be reduced to $0 and the rest of the credit is lost. 
• Cannot be claimed as a dependent on any one else's return (The person claiming the student on their return may claim the credit)
• Be enrolled for at least one academic period beginning in the tax year. Academic Period can be semesters, trimesters, quarters, or any other period of study such as a summer school session. The school determines 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.
• Be enrolled or taking courses at an eligible educational institution.
• Be taking higher education course or courses to get a degree or other recognized education credential or to get or improve job skills.
• To claim the full credit, your modified adjusted gross income (MAGI) must be $80,000 or less ($160,000 or less for married filing jointly).
• You receive a reduced amount of the credit if your MAGI is over $80,000 but less than $90,000 (over $160,000 but less than $180,000 for married filing jointly).
• You cannot claim the credit if your MAGI is over $90,000 ($180,000 for joint filers).
• You cannot be Married Filing Separately

American Opportunity Tax Credit.

• Available for the first 4 years of college
• Max amount is $2,500 per student
• Partially refundable credit meaning if your tax liability is $0, 40% (up to $1,000) is refundable
• Be enrolled in a degree or credential seeking program
• Not have a felony drug conviction
• Be enrolled at least half time
• Cannot be claimed as a dependent on anyone else's return. (The person claiming the student may claim the credit)
• To claim the full credit, your modified adjusted gross income (MAGI) must be $80,000 or less ($160,000 or less for married filing jointly).
• You receive a reduced amount of the credit if your MAGI is over $80,000 but less than $90,000 (over $160,000 but less than $180,000 for married filing jointly).
• You cannot claim the credit if your MAGI is over $90,000 ($180,000 for joint filers).

[Hal_Al · Accepted solution]

Q. What Payments for education and training from Veterans affairs do I claim?

A. You do not claim any VA benefits as income.

Q. Can I claim a tuition credit, if I am getting VA assistance.

A. Generally, yes.  Most VA assistance is stipend-based (living expenses), you are free to use that money any way you want and are not require to allocate it to tuition, at tax time.  However, if you received tuition based benefits, you may not use those amounts to claim the tax credit.