What student tax credit can I claim for my education expenses?

March 05, 2021 : H&R Block

Are you a college student? Though there are a lot of expenses associated with college, there are a few student tax credits and deductions you can take to lower your taxable income.

Read on to learn about the college student tax credits and deductions, including college education tax credits and a post-college student tax deduction.

You should also tune in if you’re a parent to a college student or recent college graduate, as you may qualify for potential tax credits and deductions listed below as well!

Available college student tax credits

The student tax credit examples that follow are the only credits available to most college students:

Let’s dive into the details of each college student tax credit.

Education Tax Credit #1 – “The American Opportunity Tax Credit”

The first tax credit available to college students is the American Opportunity Tax Credit, or AOTC. It’s sometimes referred to as the college tuition tax credit, because it’s often taken to offset the costs of college tuition.

It allows a maximum student tax credit of up to $2,500 per student of these costs:

    • college studentTuition
    • Fees
    • Course materials
    • Textbooks required for a course are a qualifying college student tax credit expense for the American Opportunity Credit. This is true regardless of where you buy them.

What doesn’t qualify?

    • Insurance and associated fees
    • Medical expenses
    • Room and board
    • Same expenses paid with tax-free educational assistance.
    • Same expenses used for any other tax deduction, credit or educational benefit.
    • Student fees, unless required as a condition of enrollment or attendance
    • Transportation expenses

The AOTC covers both of these:

      • 100% of the first $2,000 of qualified expenses
      • 25% of the next $2,000 of expenses

It’s usually available to degree-seeking students during the first four years of their post-secondary education while they’re taking at least half of a full work load. This educational tax credit is also partially refundable. So, if you’ve paid your applicable taxes and there’s some of the credit left over, you could receive money back as a refund. Additionally, parents of college students may also qualify for the AOTC.

Learn more about the specifics of the American Opportunity Tax Credit. The corresponding tax form for this credit is Form 1098-T, which reports the education expenses you paid to the school.

The Education Tax Credit #2 – “Lifetime Learning Credit”

The Lifetime Learning Credit is another popular tax credit for college students as well as lifetime learners. It’s not an education tax credit exclusively for college students, but general learning credit for lifetime learners. Here are some specifics:

  • It allows a credit of 20% of the student’s first $10,000 of qualifying expenses. The maximum credit is $2,000 per return.
  • It’s available to students taking at least one post-secondary course that’s either:
    • Part of a degree program
    • Taken to acquire or improve job skills

Textbooks aren’t qualifying student tax credit expenses for the Lifetime Learning Credit. There’s an exception if you have to buy books directly from the institution (not the bookstore) as a condition of attendance.

Learn more about the Lifetime Learning Credit. The corresponding tax form for this credit is Form 1098-T, which reports the education expenses you paid to the school.

Bonus: The student tax deduction – “Student Loan Interest Deduction”

If you’re a recent college graduate, you may be paying back the student loans you used to finance your higher education. If this is the case, you could qualify to deduct up to $2,500 of student loan interest on your return each year. You can claim this student education deduction as an adjustment to income and don’t need to itemize deductions to claim it.

There are specific limitations to this student tax deduction. Learn more about the Student Loan Interest Deduction.

Get help seeking college student tax credits and deductions

Learning how to file taxes as a college student can be difficult and confusing. With many ways to file with H&R Block, we can walk you through the decision-making process to get the greatest tax benefit for you and anyone that may qualify to claim you as a dependent in a way that works for you.

Have other student tax filing questions?  Be sure to visit our Tax Guide for College Students and find out about student forms that can be filed for free.

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