This credit is not refundable, so you must have a tax liability to claim this credit

The Lifetime Learning Credit (LLC) can be claimed by a parent or spouse if they claim an eligible student as a dependent or the student can claim the LLC themselves if no one else claims them as a dependent.

Who Is Eligible

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An eligible student has to be taking courses at an eligible educational institution, working to improve job skills, obtaining a degree or certification, and must be enrolled in at least one academic period that began in the tax year. If you are claiming the AOTC, you cannot claim the LLC. To claim the full credit, your MAGI must be $52,000 or less for single filers or $104,000 or less for married filing jointly filers

What Qualifies

The LLC allows you to claim 20 percent of the first $10,000 of qualified education expenses as a tax credit per taxpayer. For this credit, qualified education expenses include tuition, fees, student activity fees that all students must pay and other related expenses for eligible students. These expenses must be required for enrollment or attendance at an eligible educational institution to qualify. Living expenses such as room and board, insurance, and transportation do not qualify for the LLC.

How to Apply the Credit

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To claim the tax credit, you’ll need to use IRS Form 8863 titled Education Credits (American Opportunity and Lifetime Learning Credits) to calculate the credit amount for your situation. First, you will need to complete Part III of the form separately for each eligible student for which you are claiming a tax credit. You will need your student’s form 1098-T available to answer certain questions on this form, as well as a complete total of all qualifying education expenses. Then fill out Part II and place the results on your form 1040 or form 1040A as instructed.

Tuition and Fees Deduction

The tuition and fees deduction allows a person to deduct qualified education expenses for a qualified student. The student could be your spouse, dependent or yourself as long as someone else cannot claim you as a dependent. Those filing returns as married filing separate do not qualify.

Who Is Eligible

You can claim this deduction even if you don’t use itemized deductions. You must have MAGI of $130,000 or less if filing as married filing jointly or $65,000 or less if filing as single to fully claim this deduction. To qualify, you or your spouse cannot be a nonresident alien for any part of the tax year unless you elected to be treated as a resident alien for tax purposes.

What Qualifies

You can deduct up to $4,000 in qualified education expenses from your income. This deduction considers qualified education expenses to consist of tuition and particular related expenses required in order to attend a qualified educational institution. Related expenses must be required to be paid directly to the institution in order to attend and can include student activity fees and expenses for course-related books, supplies and equipment. Qualified institutions are determined by their eligibility to participate in a student aid program administered by the US Department of Education. You cannot use expenses to double benefit by using them for this deduction and another deduction or credit.

How to Apply the Deduction

You will need to complete IRS Form 8917 (Tuition and Fees Deduction) to claim this deduction. Once you complete this form, enter the amount determined on line 6 of Form 8917 on line 34 of Form 1040 or line 19 of Form 1040A.

Employer-Provided Educational Assistance

Whether you are eligible for tax-free status of employer-provided educational assistance will depend on how your employer structures their program.

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