Publication 17
taxmap/pub17/p17-177.htm#en_us_publink1000174558taxmap/pub17/p17-177.htm#en_us_publink1000252789Hope credit not available for 2010.(p230)
This credit is not available because the special rules for students
attending school in a Midwestern disaster area have expired.
taxmap/pub17/p17-177.htm#TXMP647e36bcFor 2010, there are two tax credits available to persons who
pay expenses for higher (postsecondary) education. They are:
- The American opportunity credit, and
- The lifetime learning credit.
The chapter will present an overview of these education credits.
To get the detailed information you will need to claim either of the credits,
and for examples illustrating that information, see chapters 2 and 3 of
Publication 970.
For each student, you can choose for any year only one of the
credits. For example, if you choose to take the American opportunity credit for
a child on your 2010 tax return, you cannot, for that same child, also claim the
lifetime learning credit for 2010.
If you are eligible to claim the American opportunity credit
and you are also eligible to claim the lifetime learning credit for the same
student in the same year, you can choose to claim either credit, but not both.
If you pay qualified education expenses for more than one student
in the same year, you can choose to take the American opportunity and the
lifetime learning credits on a per-student, per-year basis. This means that, for
example, you can claim the American opportunity credit for one student and the
lifetime learning credit for another student in the same year.
taxmap/pub17/p17-177.htm#en_us_publink1000221557
Table 35-1. Comparison of Education Credits
Caution.
You can claim both the American opportunity credit and the lifetime learning
credit on the same return—but not for the same student.
| | American Opportunity Credit
| Lifetime Learning Credit |
| Maximum credit | Up to $2,500 credit per
eligible student | Up to $2,000 credit per
return |
| Limit on modified adjusted gross income (MAGI) | $180,000 if married filling jointly;
$90,000 if single, head of household, or qualifying widow(er)
| $120,000 if married filling jointly;
$60,000 if single, head of household, or qualifying widow(er)
|
| Refundable or nonrefundable | 40% of credit may be refundable | Credit limited to the amount of tax you must pay on your
taxable income |
| Number of years of postsecondary education | Available
ONLY for the first
4 years of postsecondary education
| Available for all years of postsecondary education and for
courses to acquire or improve job skills |
| Number of tax years credit available | Available
ONLY for
4 tax years per eligible student
| Available for an unlimited number of years |
| Type of degree required | Student must be pursuing an undergraduate degree or other
recognized education credential | Student does not need to be pursuing a degree or other recognized
education credential |
| Number of courses | Student must be enrolled at least half time for at least
one academic period beginning during the tax year | Available for one or more courses |
| Felony drug conviction | No felony drug convictions on student's records | Felony drug convictions are permitted |
| Qualified expenses | Tuition and required enrollment fees. Course-related books,
supplies, and equipment
do not need to be purchased from the institution in order to
qualify.
| Tuition and required enrollment fees, including amounts
required to be paid to the institution for course-related books, supplies, and
equipment.
|
| Payments for academic periods | Payments made in 2010 for academic periods beginning in
2010 and in the first 3 months of 2011 |
taxmap/pub17/p17-177.htm#en_us_publink1000174576There are several differences between these two credits. These
differences are summarized in
Table 35-1, later.
Useful items
You may want to see:
Publication 970 Tax Benefits for Education Form (and Instructions) 8863:
Education Credits (American Opportunity and Lifetime Learning
Credits) taxmap/pub17/p17-177.htm#en_us_publink1000235852You may be able to claim an education credit if you, your spouse,
or a dependent you claim on your tax return was a student enrolled at or
attending an eligible educational institution. The credits are based on the
amount of qualified education expenses paid for the student in 2010 for academic
periods beginning in 2010 and in the first 3 months of 2011.
For example, if you paid $1,500 in December 2010 for qualified
tuition for the spring 2011 semester beginning in January 2011, you may be able
to use that $1,500 in figuring your 2010 education credit(s).
 | You cannot use any amount paid in 2009 or 2011 to figure
your 2010 education credit(s). |
taxmap/pub17/p17-177.htm#en_us_publink1000235986An academic period includes a semester, trimester, quarter, or
other period of study (such as a summer school session) as reasonably determined
by an educational institution. In the case of an educational institution that
uses credit hours or clock hours and does not have academic terms, each payment
period can be treated as an academic period.
taxmap/pub17/p17-177.htm#en_us_publink1000235988An eligible educational institution is any college, university,
vocational school, or other postsecondary educational institution eligible to
participate in a student aid program administered by the U.S. Department of
Education. It includes virtually all accredited public, nonprofit, and
proprietary (privately owned profit-making) postsecondary institutions. The
educational institution should be able to tell you if it is an eligible
educational institution.
Certain educational institutions located outside the United States
also participate in the U.S. Department of Education's Federal Student Aid (FSA)
programs.
taxmap/pub17/p17-177.htm#en_us_publink1000235854If a student is claimed as a dependent on another person's tax
return, only the person who claims the student as a dependent can claim a credit
for the student's qualified education expenses. If a student is not claimed as a
dependent on another person's tax return, only the student can claim a credit.
Generally, qualified education expenses paid on behalf of the
student by someone other than the student (such as a relative) are treated as
paid by the student. However, qualified education expenses paid (or treated as
paid) by a student who is claimed as a dependent on your tax return are treated
as paid by you. Therefore, you are treated as having paid expenses that were
paid from your dependent student's earnings, gifts, inheritances, savings, etc.
taxmap/pub17/p17-177.htm#en_us_publink1000235855You cannot take an education credit if any of the following apply.
- You are claimed as a dependent on another person's tax return,
such as your parent's return.
- Your filing status is married filing separately.
- You (or your spouse) were a nonresident alien for any part
of 2010 and did not elect to be treated as a resident alien for tax purposes.
- Your MAGI is one of the following.
- American opportunity credit: $180,000 or more if married
filing jointly, or $90,000 or more if single, head of household, or qualifying
widow(er).
- Lifetime learning credit: $120,000 or more if married filing
jointly, or $60,000 or more if single, head of household, or qualifying
widow(er).
Figure 35-A, at the end of this chapter, may be helpful in determining
if you can claim an education credit on your tax return.
 | There are a number of factors, such as your filing status,
your MAGI, and whether you are subject to the alternative minimum tax, that will
affect the amount of any education credit you are eligible to claim. When you
figure your taxes, you may want to compare the different education credits in
order to choose the method(s) that gives you the lowest tax liability. If you
qualify, you may find that a combination of credit(s) and other education
benefit(s) gives you the lowest tax. See Publication 970 for information on
other benefits. |
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