Lifetime Learning Tax Credit – Expenses That Qualify

The Lifetime Learning Credit is for those who attend college classes. It allows them to get a 20% tuition expenses credit with a phase-out limit of $2,000 in tax credits on their first $10,000 of tuition expenses.

Lifetime learning tax credit

This credit is for you, your spouse, or your dependents that are in an eligible school, and you had to pay the expenses for them. It differs from the American Opportunity Credit because you do not have to be in the first four years of undergraduate classes. People who have taken only one class can qualify to claim the lifetime learning credit.

Educational Institutions that Qualify

Accredited schools are considered eligible. Additionally, post-secondary schools and vocations schools qualify too. If the school accepts federal student aid programs via the US Department of Education, you can claim the Lifetime Learn tax credit for the tuition that you paid.

Expenses That Qualify

Expenses that are eligible for this credit include the fees and tuition that were paid for schooling. However, anything outside of that such as health, insurance, room and board, books, etc. are not eligible for the credit.

Additionally, you have to be the person who is responsible for covering the cost. You also have to reduce your qualifying expenses by the amount of assistance you received from various things, such as grants or reimbursements. If you borrowed money, such as from a student loan, you do not have to include this.

Who Is Eligible for This Credit

If you have a dependent child in college, you can claim this credit on your federal tax return. However, if your college student is not considered your dependen,t they are the ones who claim the credit on their federal tax return. In the event that you do not have a dependent but you pay their college expenses, you are not eligible for the tax credit.

Taxpayers could get $4,000 if they earned under $65,000 and under $130,000 for couples. However, if your income is between $65,000 and $80,000 or $130,000 and $160,000 for couples the maximum amount you will receive is $2,000.

Income Limitations on the Credit

  • To claim the full credit, your MAGI, modified adjusted gross income must be $66,000 or less or $132,000 or less if you are married and filing jointly.
  • If your MAGI is between $56,000 and $66,000 (between $112,000 but less than $132,000 for married filing jointly), you receive a reduced amount of the credit.
  • If your MAGI is over $66,000 ($132,000 for joint filers), you cannot claim the credit.

MAGI, for most people, is the amount of AGI, adjusted gross income, shown on your tax return. On Form 1040A, AGI is on line 22 and is the same as MAGI. If you file Form 1040, AGI is on line 38.

How to Claim the Lifetime Learning Credit

If you file your taxes online, they will make sure you get the maximum amount of money possible when claiming the lifetime learning credit. This results in you receiving your largest refund ever!