Information for Only the Lifetime Learning Credit(p238)

For the tax year, you may be able to claim a lifetime learning credit of up to $2,000 ($4,000 for students in a Midwestern disaster area) for qualified education expenses paid for all students enrolled in eligible educational institutions. There is no limit on the number of years the lifetime learning credit can be claimed for each student.

For purposes of the lifetime learning credit, an eligible student is a student who is enrolled in one or more courses at an eligible educational institution (as defined under Qualified Education Expenses, earlier.

The amount of the lifetime learning credit is 20% of the first $10,000 of qualified education expenses you paid for all eligible students. The maximum amount of lifetime learning credit you can claim for 2008 is $2,000 (20% × $10,000). However, that amount may be reduced based on your MAGI. See Effect of the Amount of Your Income on the Amount of Your Credit, earlier.

Bruce and Toni are married and file a joint tax return. For 2008, their MAGI is $75,000. Toni is attending a local college (an eligible educational institution) to earn credits toward a degree in nursing. She already has a bachelor's degree in history and wants to become a nurse. In August 2008, Toni paid $6,000 of qualified education expenses for her Fall 2008 semester. Bruce and Toni can claim a $1,200 (20% × $6,000) lifetime learning credit on their 2008 joint tax return.

For these students, the rate is modified to 40% of qualified expenses paid, with a maximum lifetime learning credit allowed on your return of $4,000. If you are claiming a lifetime learning credit for both students in a Midwestern disaster area and other students, the qualified education expenses taken into account for other students cannot exceed $10,000 reduced by the qualified education expenses of the students in a Midwestern disaster area.

To help you figure your lifetime learning credit, you should receive Form 1098-T. Generally, an eligible educational institution (such as a college or university) must send Form 1098-T to each enrolled student by February 2, 2009.

You claim the lifetime learning credit by completing Parts II and III of Form 8863 and submitting it with your Form 1040 or 1040A. Enter the credit on Form 1040, line 50, or Form 1040A, line 31.

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