How is the amount of an education credit determined?

The amount of an education credit is determined by the amount of qualified tuition and related expenses you paid for each eligible student and the amount of your Modified Adjusted Gross Income (MAGI). For more information, refer to Form 8863 (PDF), Education Credits, Publication 970, Tax Benefits for Education, or Tax Topic 605, Education Credits.

Can I claim the Hope Credit or the Lifetime Learning Credit for higher education expenses paid by a government-subsidized loan?

Higher education expenses paid by the proceeds of a government subsidized loan expenses may qualify for the credit if you must repay the loan. The credit is claimed in the year in which the expenses are paid, not in the year in which the loan is repaid.

For more information, refer to Form 8863 (PDF), Education Credit (Hope and Lifetime Learning Credits), Publication 970, Tax Benefits for Education, or Tax Topic 605, Education Credits.

What is a Lifetime Learning Credit?

This credit is a nonrefundable tax credit with a dollar limit per family that is available for qualified tuition and related expenses of higher education whether the student is at the undergraduate or graduate level. The Lifetime Learning Credit is calculated by taking a percentage of the qualified educational expenses paid. For additional information refer to Publication 970, Tax Benefits for Education, Tax Topic 605 , Education Credits, or Form 8863 (PDF), Education Credits (Hope and Lifetime Learning Credits).

Who can claim the Lifetime Learning Credit?

Generally, you can claim the Lifetime Learning Credit if all three of the following requirements are met.

1. You pay qualified tuition and related expenses of higher education.
2. You pay these the tuition and related expenses for an eligible student.
3. The eligible student is you, your spouse, or a dependent for whom you claim an exemption on your tax return.

The Lifetime Learning Credit is based on qualified tuition and related expenses you pay for yourself, your spouse, or a dependent for whom you can claim an exemption on your tax return.

As with the Hope Credit, generally, the Lifetime Learning Credit is allowed for qualified tuition and related expenses paid in the tax year for an academic period beginning in that year or in the first 3 months of the following year.

For purposes of the Lifetime Learning Credit, an eligible student is a student who is enrolled in one or more courses at an eligible educational institution to acquire or improve job skills

In general, an eligible educational institution is an accredited college, university, vocational school, or other postsecondary educational institution, including accredited, public, nonprofit, and proprietary (privately-owned, profit-making) postsecondary institutions. Additionally, in order to be an eligible educational institution, the school must be eligible to participate in a student aid program administered by the Department of Education. The educational institution should be able to tell you if it is an eligible educational institution.

You cannot claim the Lifetime Learning Credit if any of the following apply.

1. your filing status is married filing separately.

2. you are listed as a dependent in the Exemptions section on another person's tax return (such as your parent's). (See Who Can Claim a Dependent's Expenses, later.)

3. your modified adjusted gross income is above a specified amount. (Modified adjusted gross income is explained later under Does the Amount of Your Income Affect the Amount of Your Credit. )

4. you (or your spouse) were a nonresident alien for any part of the tax year and the nonresident alien did not elect to be treated as a resident for tax purposes. (For additional information, refer to Publication 519 U.S. Tax Guide for Aliens); or

5. you claim the Hope Credit for the same student in same year

For more information, refer to Publication 970, Tax Benefits for Education, Tax Topic 605, Education Credits, or Form 8863 (PDF), Education Credits (Hope and Lifetime Learning Credits).

Is an education credit available for the cost of a high school student taking college classes before graduation from high school?

The cost of college classes taken while a student is attending high school may qualify for the education tax credit if the requirement for the credit are met.

For more information, refer to Publication 970, Tax Benefits for Education, Tax Topic 605, Education Credits, or Form 8863 (PDF), Education Credits (Hope and Lifetime Learning Credits).