Education Tax Credits

Two education credits are available to help cover the costs of higher education. However, the ability to claim these incentives may be reduced or eliminated depending on your filing status and Adjusted Gross Income. The "American Opportunity Tax Credit" allows taxpayers to claim 100% of the first $2,000 in qualified tuition and educational expenses plus 25% of the next $2,000 for a maximum credit of $2,500. This credit can be taken for each eligible student you have, so for example, if a taxpayer has three children in college at one time, they may be eligible for up to $7,500 in tax credits. Up to 40% of this credit may be refundable even if you have no tax liability. This credit is available through 2017.  The "Lifetime Learning Credit" can provide a tax savings of up to $2,000 per return. The maximum credit is $2,000 per year regardless of the number of students in college. These credits are for specific qualified education expenses paid for during the tax year. Please see Qualified Education Expenses topic below for more details.