(LifeWire) - Lifetime Learning Tax Credit Basics:
The Lifetime Learning Tax Credit is aimed at households with higher-education students, offering up to a $2,000 refund on taxes paid. Unlike the Hope Scholarship Credit's limitation to the first two years of college or trade school, the Lifetime Learning Tax Credit can be deployed as long as there is a dependent in higher education. Special concessions and rules apply for families with so-called "Gulf Opportunity Zone students" (those affected by Hurricane Katrina). The amount of the credit takes into account income, the amount of tuition and related expenses, and the amount of scholarships and any allowance that has eased the payment burden. To apply, the taxpayer must file IRS Form 8863. Schools send the needed information to fill out the form and the documentation via a 1098-T statement by Jan. 31 of a given year. Schools also provide counselors to help with calculations. The deduction applies to tuition and expenses paid in the year of the tax return, and for the first three months of the next year. A family can claim the Lifetime Learning Tax Credit and other educational credits as long as they are not used for the same person.
Qualifying for a Lifetime Learning Tax Credit:
To be eligible, a taxpayer must file a tax return owing money, make less than $57,000 of modified adjusted gross income (or $114,000 on a joint return), and have a dependent in post-secondary education. The dependent can also be the taxpayer or spouse.
Learn More About the Lifetime Learning Tax Credit:
For more information about the Lifetime Learning Tax Credit, visit: www.nasfaa.org.
