To qualify for the lifetime learning credit:
- You paid qualified education expenses for higher education
- The qualified education expenses were for an eligible student
- The eligible student is you, your spouse, or a dependent on your tax return
- For the full credit, your 2021 MAGI (modified adjusted gross income) is less than $80,000 ($160,000 if you are filing jointly)
- For a reduced credit, your MAGI is between $80,000 and $90,000 ($160,000 and $180,000 if you're filing jointly)
If your entire tuition was covered by a scholarship or paid using a distribution from an education savings account, then you would not be eligible for the Lifetime Learning Credit. You can get around this limitation in some circumstances by adding the distribution or scholarship to your taxable income and using the tuition expenses for the Lifetime Learning Credit. This may reduce your taxes or it may make no difference at all. In some cases, it will actually increase your taxes.
If you had no taxable income then the Lifetime Learning Credit would not help you because it is a nonrefundable credit, meaning it cannot give you money back if you already do not owe any tax.
