TurboTax HelpIntuitWhat education tax credits are available?
by TurboTax•2926• Updated 1 month ago
Two available education tax credits are: the American Opportunity Tax Credit and the Lifetime Learning Credit. We'll check to see if you qualify for either of these credits when we prepare your return.
Note:
- Only one of these two credits can be claimed for a student in a year.
- Qualified education expenses paid by someone other than the student are treated as paid by the student.
- Qualified education expenses paid (or treated as paid) by a student who's claimed as a dependent on your tax return, are treated as paid by you.
Here’s a summary of the two credits:
| American Opportunity Tax Credit | Lifetime Learning Credit | |
|---|---|---|
| An eligible student must be: | You, your spouse or your dependent, enrolled at an eligible institution | You, your spouse or your dependent, enrolled at an eligible institution |
| Number of years of credit availability: | Four years per student | No limit |
| The education must be: | -One of the student’s first four years of postsecondary school -For pursuing an undergraduate degree or educational credential | For any year of postsecondary education, or for courses to get or improve job skills, including non-degree |
| Minimum course load: | At least half-time enrollment | One or more courses |
| If someone claims the student as their dependent | Only that person can claim the credit | Only that person can claim the credit |
| If the student is not claimed as your dependent | Only the student claim the credit | Only the student claim the credit |
| A credit isn't allowed if you: | -Are filing Married Filing Separately -Are a nonresident alien -Have a felony drug conviction | -Are filing Married Filing Separately -Are a nonresident alien |
| Modified adjusted gross income (MAGI) limits, not Married Filing Jointly: | MAGI must be below $90,000. Phase-out begins at MAGI of $80,000. | MAGI must be below $90,000. Phase-out begins at MAGI of $80,000. |
| MAGI limits if filing Married Filing Jointly | MAGI must be below $180,000. Phase-out begins at MAGI of $160,000. | MAGI must be below $180,000. Phase-out begins at MAGI of $160,000. |
| Maximum credit amount: | $2,500 (100% of the first $2,000 of expenses plus 25% of the next $2,000) | $2,000 (20% of the first $10,000 of expenses) |
| Credit refundability: | 40% of the credit is refundable (maximum $1,000 refundable). The remainder is non-refundable. | Entirely non-refundable |
| For tax year 2024, payment must be made: | In 2024 for academic periods beginning in 2024 or in the first 3 months of 2025 | In 2024 for academic periods beginning in 2024 or in the first 3 months of 2025 |
| Eligible expenses are reduced by: | Any expenses paid for with tax-free assistance | Any expenses paid for with tax-free assistance |
| These are qualified education expenses: | Tuition and enrollment fees Course-related books, supplies, equipment Must be paid by you, your spouse if filing Married Filing Jointly (MFJ), or a student dependent | Tuition and enrollment fees Course-related books, supplies, equipment if paid to the institution as condition of enrollment Must be paid by you, your spouse if filing MFJ, or a student dependent |
| Some non-eligible expenses: | Room and board, insurance, medical expenses, student health fees, transportation, personal expenses, sports, games, hobbies | Room and board, insurance, medical expenses, student health fees, transportation, personal expenses. Sports, games and hobbies, unless it’s part of a job skills course |
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