Lifetime Learning Credit for Higher Education Expenses

The Lifetime Learning Credit is a terrific opportunity for those looking to expand their educational abilities and skills. The only prerequisite? You have to be enrolled in an eligible educational institution at either undergraduate, graduate, or professional degree-level coursework. Including courses that help acquire new job skills as well.

Lifetime Learning Credit for Higher Education |

There’s no limit on how many years you can claim this tax credit, which means it could save you up to $2000 per year as long as you remain enrolled.

The credit is 20% for the first $10,000 of qualified education expenses with a maximum of $2,000 per tax year. This credit goes to reduce the overall tax that you owe. It is not a refunded credit.

To claim the LLC, you must meet all three of these requirements:

  • You, your dependent(s), or a third party pay qualified education expenses for higher education.
  • You or your dependent pays qualifying tuition at an eligible institution.
  • The person taking classes must be yourself, your spouse, or a dependent listed on your tax return.

Eligibility means the student must be enrolled for at least one academic period during the tax year and taking classes at eligible institutions. The courses are for the purposes of getting a degree or other qualified educational credentials, such as a certification program.

Additionally, the income limits for claiming this credit are $69,000 for individuals and $138,000 for married couples filing jointly. You cannot file separately to receive this credit. Also, if someone else can claim you as a dependent on their tax return, you cannot claim this credit.

In other words, if you are paying expenses for an adult child who is living on their own, has a job, and covers their expenses and files their tax return, you cannot claim the LLC. Even though you may be paying for the tuition expenses the fact that your adult child is otherwise self-sufficient means you cannot claim the tax credit.

How to Claim the Lifetime Learning Credit

To claim the LLC you will need a Form 1098-T from the college, university, or qualified academic institution. With that, you would need to file a form 8863 attached to your tax return for the tax year in which these fees were paid.

If you receive tax-free funding such as a grant for your educational expenses you will need to deduct that amount from the amount paid to the institution because those are not considered out-of-pocket expenses.

It’s important to note that you can’t claim more than one education at a time. In other words, you can’t claim the American Opportunity Tax Credit and the Lifetime Learning Credit in the same year. 

If we can assist you in filing for this educational tax credit please contact us using the form below, or by calling (740) 374-6942.

This information is not intended as legal or tax advice. Cowdery Tax and its representatives does not offer legal or tax advice. We offer services for business bookkeeping, payroll, tax payments, and personal tax filings. We share information that is publicly available. Tax laws may change with or without notice that may alter or change the information contained in this publication.