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Tax Tips
Overview
- To claim the credit, your modified adjusted gross income (MAGI) must be less than $57,000 ($114,000 if Married Filing Jointly).
- The Lifetime Learning Credit can be claimed for 20% of the first $10,000 of qualified expenses, up to $2,000.
- The credit is gradually reduced if your income is between $47,000 and $57,000 ($94,000 and $114,000 if Married Filing Jointly).
The Lifetime Learning Credit can help offset some of the expenses of continuing your education.
Am I eligible?
Unlike the Hope Credit, which can be claimed only during the first 2 academic years, you may claim the Lifetime Learning Credit for qualifying courses at the undergraduate, graduate or professional level. Your MAGI must be $57,000 ($114,000 if Married Filing Jointly) or less to claim the full credit. You can't claim the credit if you're Married Filing Separately. To see if you qualify for education credits, use our Education Tax Benefits Estimator.How much Lifetime Learning Credit can I claim?
Whether you attend an eligible institution on a full- or part-time basis, the credit is 20% of the first $10,000 (up to $2,000 per return) you pay for eligible students in your family. The amount of your credit is reduced if your MAGI is between $47,000 and $57,000 (between $94,000 and $114,000 if you're Married Filing Jointly). You may use the credit on a yearly basis, and it can even be applied to expenses you pay during 2007 for an academic period that begins in the first 3 months of 2008.Lifetime Learning Credit Tips
- The Hope and Lifetime Learning Credits can't be used for the same student.
- You can claim a Hope Credit for each qualifying student and a Lifetime Learning Credit for a different student's qualifying expenses.
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Frequently Asked Questions
Question: How do I know whether to take the Lifetime Learning Credit or Hope Credit?
Answer: The Hope Credit applies only to students who have not completed 2 years of college and only to students who were enrolled on at least a half-time basis. Therefore, if you were not a freshman or sophomore at the beginning of the year or if you are not attending school on at least a half-time basis, you can't claim the Hope Credit. The Lifetime Learning Credit, on the other hand, is available for any level of post-secondary education, including graduate courses. If you're eligible for both credits, choose the one that results in the larger credit. In addition, you can claim the Hope Credit only 2 times. See Form 8863 for more information.
Question: If my husband is going to trade school to learn more about his field, is his tuition tax deductible on our next year's return?
Answer: It depends. If the courses are being taken at an accredited institution, he may qualify for the Tuition and Fees Deduction or the Lifetime Learning Credit. If he doesn't qualify for either of these benefits, he can deduct the expenses as an itemized deduction subject to the 2% of adjusted gross income limit if the education improves knowledge in his current profession but does not qualify him for a new profession. Compare the tax savings from each benefit for which he's eligible and use the one that saves the most tax.
Question: I have already filed my federal return, but I found out I can get a Lifetime Learning Credit. What must I do to amend my refund?
Answer: Wait until you have received any refund that you have coming from your original return. Then you can file Form 1040X to claim the Lifetime Learning Credit. Attach a completed Form 8863 and be sure to explain that you are amending your filing to claim the Lifetime Learning Credit. The credit can be as much as $2,000. If you need any help, your local H&R Block tax office can prepare the forms for you.
More Education FAQs
Answer: The Hope Credit applies only to students who have not completed 2 years of college and only to students who were enrolled on at least a half-time basis. Therefore, if you were not a freshman or sophomore at the beginning of the year or if you are not attending school on at least a half-time basis, you can't claim the Hope Credit. The Lifetime Learning Credit, on the other hand, is available for any level of post-secondary education, including graduate courses. If you're eligible for both credits, choose the one that results in the larger credit. In addition, you can claim the Hope Credit only 2 times. See Form 8863 for more information.
Question: If my husband is going to trade school to learn more about his field, is his tuition tax deductible on our next year's return?
Answer: It depends. If the courses are being taken at an accredited institution, he may qualify for the Tuition and Fees Deduction or the Lifetime Learning Credit. If he doesn't qualify for either of these benefits, he can deduct the expenses as an itemized deduction subject to the 2% of adjusted gross income limit if the education improves knowledge in his current profession but does not qualify him for a new profession. Compare the tax savings from each benefit for which he's eligible and use the one that saves the most tax.
Question: I have already filed my federal return, but I found out I can get a Lifetime Learning Credit. What must I do to amend my refund?
Answer: Wait until you have received any refund that you have coming from your original return. Then you can file Form 1040X to claim the Lifetime Learning Credit. Attach a completed Form 8863 and be sure to explain that you are amending your filing to claim the Lifetime Learning Credit. The credit can be as much as $2,000. If you need any help, your local H&R Block tax office can prepare the forms for you.
More Education FAQs
Related IRS Forms & Publications
- Form 8863 - Education Credits (Hope and Lifetime Learning Credits)
- Form 1098-T - Tuition Payments Statement
- Form 1098-T Instructions
- Form 1099-Q - Payments from Qualified Education Programs (Under Sections 529 and 530) (Info Copy Only)
- Form 1099-Q Instructions
- Form 5305-E - Education Individual Retirement Trust Account
- Form 5305-EA - Education Individual Retirement Custodial Account
- Publication 970 - Tax Benefits for Education
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