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Frequently Asked Tax Questions

Childcare Credit, Other Credits - Education Credits

  1. How is the amount of an education credit determined?
  2. What expenses qualify for an education credit?
  3. Do tuition and related expenses paid to attend a private high school qualify for an education credit?
  4. Can I claim an education credit if my filing status is married filing separately?
  5. If I pay college tuition and fees with a tax-free scholarship, can I claim an education credit on Form 8863 for those payments?
  6. If the amount of my qualified tuition and related expenses is greater than the amount of my scholarship, may I claim the excess expenses on Form 8863?
  7. Can I claim an education credit for higher education expenses paid by a government-subsidized loan?
  8. Who can claim the American opportunity tax credit?
  9. What is the lifetime learning credit?
  10. Who can claim the lifetime learning credit?
  11. Is there an education credit for the cost of a high school student taking college classes before graduation from high school?

Rev. date: 11/15/2016

How is the amount of an education credit determined?

To calculate an education credit you must factor in:
The education tax credit amount for each eligible student is also subject to a phaseout.   
You must use Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), to calculate and claim an education credit.
Note: You can't claim the American opportunity credit on either an original or an amended return if either you or the student didn't have a taxpayer identification number by the due date of your return (including extensions), even if you or the student later gets one of those numbers.

Rev. date: 11/17/2016

What expenses qualify for an education credit?

Expenses that qualify for an education credit (whether the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit) are qualified tuition and related expenses paid by the taxpayer during the taxable year. Qualified tuition and related expenses are tuition and fees required for the enrollment or attendance of the taxpayer, the taxpayer's spouse, or any dependent of the taxpayer at an eligible educational institution for courses of instruction.  
For the AOTC provisions, student activity fees are included in qualified education expenses only if the fees must be paid to the institution as a condition of enrollment or attendance. Expenses for books, supplies, and equipment needed for a course of study are included in qualified education expenses whether or not the materials are purchased from the educational institution.
For the Lifetime Learning Credit, student activity fees and expenses for course-related books, supplies and equipment are included in qualified education expenses only if the fees and expenses must be paid to the institution for enrollment or attendance by an eligible student.
Qualified tuition and related expenses don't include the following types of expenses:
An eligible educational institution means a college, university, vocational school, or other postsecondary educational institution that's accredited and eligible to participate in the federal financial student aid programs administered by the Department of Education.
Note: You can't claim the AOTC on either an original or an amended return if either you or the student didn’t have a taxpayer identification number by the due date of your return (including extensions), even if you or the student later gets one of those numbers.

Rev. date: 11/17/2016

Do tuition and related expenses paid to attend a private high school qualify for an education credit?

No, expenses paid to attend a private high school don't qualify for an education credit because a high school isn't an eligible educational institution.
In general, an eligible educational institution is an accredited college, university, vocational school, or other postsecondary educational institution. To be eligible, the educational institution must also be eligible to participate in a federal financial student aid program administered by the Department of Education.

Rev. date: 11/15/2016

Can I claim an education credit if my filing status is married filing separately?

No, an individual with a filing status of married filing separately may not claim an education credit.

Rev. date: 11/15/2016

If I pay college tuition and fees with a tax-free scholarship, can I claim an education credit on Form 8863 for those payments?

No, you can't claim a credit for higher education expenses paid for by a tax-free scholarship.

Rev. date: 11/15/2016

If the amount of my qualified tuition and related expenses is greater than the amount of my scholarship, may I claim the excess expenses on Form 8863?

Yes, you may claim the excess expenses by filling out Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits).

Rev. date: 11/17/2016

Can I claim an education credit for higher education expenses paid by a government-subsidized loan?

Yes, higher education expenses paid with the proceeds of a government-subsidized loan may qualify for the credit if you must repay the loan. Additionally, you claim the credit in the year in which you pay the expenses, not in the year in which you repay the loan.
Note: You can't claim the American opportunity credit on either an original or an amended return if either you or the student didn't have a taxpayer identification number by the due date of your return (including extensions), even if you or the student later gets one of those numbers. However, this requirement doesn't apply to any return (other than an amendment to any return) for any taxable year which includes December 18, 2015 if such return is filed on or before the due date of the return.

Rev. date: 11/17/2016

Who can claim the American opportunity tax credit?

You can claim the American opportunity tax credit (AOTC), if:
The maximum amount of the credit is $2,500, and 40% of the credit is refundable (up to $1,000).
An eligible student is a student who:
Note: You can't claim the AOTC on either an original or an amended return if either you or the student didn't have a taxpayer identification number by the due date of your return (including extensions), even if you or the student later gets one of those numbers.

Rev. date: 11/17/2016

What is the lifetime learning credit?

The lifetime learning credit is a nonrefundable tax credit with a per-family dollar limit that's available for qualified tuition and related expenses of higher education, whether the student is at the undergraduate or graduate level.
You calculate the lifetime learning credit by taking 20% of the first $10,000 of the qualified educational expenses paid for all eligible students. For a taxpayer with high modified adjusted gross income, a phaseout may apply.

Rev. date: 11/17/2016

Who can claim the lifetime learning credit?

Generally, you can claim the lifetime learning credit if you meet the following requirements:
You can't claim the lifetime learning credit if any of the following applies:

Rev. date: 11/17/2016

Is there an education credit for the cost of a high school student taking college classes before graduation from high school?

Yes, as long as the high school student qualifies, the American opportunity tax credit (AOTC) is available. The student must be enrolled at least half-time in a postsecondary education program leading to a degree, certificate or other recognized educational credential for at least one academic period at an eligible educational institution during the tax year. Or, the lifetime learning credit can be taken for any qualified education expenses paid for a student who is enrolled in one or more courses at an eligible educational institution to acquire or improve job skills.
Note: You can't claim the AOTC on either an original or an amended return if either you or the student didn't have a taxpayer identification number by the due date of your return (including extensions), even if you or the student later gets one of those numbers.