You may be able to take a credit of up to $2,500 for qualified education expenses paid for each student who qualifies for the AMERICAN OPPORTUNITY CREDIT. This credit equals 100% of the first $2,000, and 25% of the next $2,000 of qualified expenses paid for each eligible student. The full amount of the credit is subject to certain income limitations.
- Generally, the AMERICAN OPPORTUNITY CREDIT is available to students enrolled at least half-time who had not completed the first 4 years of higher education by the beginning of the tax year.
- If you are not eligible for this credit, you may be able to take the Lifetime Learning Credit for part or all of a student's qualified education expenses instead.
Both the AMERICAN OPPORTUNITY CREDIT and the Lifetime Learning Credit are claimed using IRS Form 8863. You may not claim both credits for the same student for the same tax year.
For complete information, please refer to Chapter 2 of Pub. 970 – Tax Benefits for Education, the IRS Instructions for Form 8863, and these IRS questions and answers.
The above information is not provided as legal or tax advice. Individuals should consult with a qualified tax professional, and/or contact the IRS Taxpayer Assistance line at 1-800-829-1040 with regards to any credit or deduction claimed on a personal tax return.