An education credit helps with the cost of higher education by reducing the amount of tax owed on your tax return. If the credit reduces your tax to less than zero, you may get a refund. There are two education credits available: The American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC).
Two important tax credits can help students and their families with the cost of college or other postsecondary education courses.
1. The American Opportunity Tax Credit (AOTC) can help with the cost of the first four years of college or another post-secondary degree or certificate program if the student attends at least half-time. The credit provides up to $2,500 per student per year for up to four years, and up to $1,000 per year may be refunded even if the person claiming the credit isn't required to file.
2. The Lifetime Learning Credit (LLC) can help with the cost of any level of post-secondary education of courses to acquire or improve job skills. The credit provides up to $2,000per return per year.
How do students and their families claim the credit?
Claim the credit on a federal tax return for the year in which the expenses were paid for you, your spouse, or your dependents. CCC issues Form 1098-Ts, Tuition Statement, to students which contains information needed to claim the credit.
For each student, only one of the credits will be claimed each tax year.
Visit Education credits at www.irs.gov to find everything you need to know or consult a tax preparer.