Publication 17
taxmap/pub17/p17-177.htm#en_us_publink1000174558taxmap/pub17/p17-177.htm#TXMP33dc371dFor 2011, 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 2011 tax return, you cannot, for that same child, also claim the lifetime learning credit for 2011.
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_publink1000221557Table 34-1. 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)
| $122,000 if married filling jointly;
$61,000 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 a 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 as of the end of the tax year | Felony drug convictions are permitted |
| Qualified expenses | Tuition, fees, and course materials required for enrollment. Course-related books, supplies, and equipment
do not need to be purchased from the institution in order to qualify.
| Tuition and fees required for enrollment or attendance (including amounts required to be paid to the institution for course-related books, supplies, and equipment).
|
| Payments for academic periods | Payments made in 2011 for academic periods beginning in 2011 and in the first 3 months of
2012 |
taxmap/pub17/p17-177.htm#en_us_publink1000174576There are several differences between these two credits. These differences are summarized in
Table 34-1, 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 2011 for academic periods beginning in 2011 and in the first 3 months of
2012.
For example, if you paid $1,500 in December 2011 for qualified tuition for the spring 2012 semester beginning in January 2012, you may be able to use that $1,500 in figuring your 2011 education credit(s).
 | You cannot use any amount paid in 2010 or 2012 to figure your 2011 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 2011 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: $122,000 or more if married filing jointly, or $61,000 or more if single, head of household, or qualifying
widow(er).
Figure 34-A
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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