Education Tax Benefits

American Opportunity Credit

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.

Lifetime Learning Credit

The Lifetime Learning Credit may be available to taxpayers who pay higher education costs but are not eligible to claim the American Opportunity Credit. The credit is equal to 20% of the first $10,000 of tuition and required fees paid each year (for all students in the family) with a maximum credit of $2,000.

Tuition & Fees Deduction

If you are not able to claim either the American Opportunity Credit or the Lifetime Learning Credit, you may still be able to deduct qualified education expenses paid during the year for yourself, your spouse, or your dependent(s). The Tuition and Fees Deduction can reduce the amount of your income subject to tax by up to $4,000, and is taken as an adjustment to income (so you can claim this deduction even if you do not itemize deductions on Schedule A of Form 1040).

Student Loan Interest Deduction

This deduction is available to individuals paying interest on student loans used for higher education and it can reduce the amount of your income subject to tax by up to $2,500.

Form 1098-T

In order to help you determine your eligibility for an education credit or tuition deduction, Baylor provides a Form 1098-T for each calendar year that tuition and fees or scholarships and grants are posted to your student account. Beginning with the 2015 1098-T, students may view their 1098-T tax statement in the E-Bill System from the eStatements tab. Students may access older 1098-Ts (2014 and prior) through BearWeb, if needed.

Click here for additional information and frequently asked questions about the Form 1098-T.

Other IRS Links
International Revenue Service
IRS Interactive Tax Assistant
How To Get Tax Help

The following information is not provided as legal or tax advice. Individuals should refer to the most recent IRS Publication 970, Tax Benefits for Higher Education [PDF] [HTML], 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.