American Opportunity and Lifetime Learning Tax Credit
A tax credit reduces the amount of income tax you have to pay. You may be more familiar with deductions, which reduce the amount of income subject to tax. However, a credit directly reduces the tax itself.
Here is a brief overview of the American Opportunity and Lifetime Learning Tax Credits:
You may be able to claim a American Opportunity credit of up to $2500 (100% of first $2000, and 25% from $2,001 to $4,000) credit in your first four years of at least half time enrollment for undergrad coursework.
LIFETIME LEARNING CREDIT
You may be able to claim a lifetime learning credit of up to $2000 - for education expenses (20% of up to $10,000) for any degree that awards a degree or credential. There is no limit on the number of years the lifetime learning credit can be claimed for each student. The lifetime learning credit may be limited by the amount of your income and the amount of your tax.
For advice concerning these tax credits, please contact your tax consultant or another expert. Our staff cannot answer specific tax questions.