If you pay for college, you likely are aware how quickly the expenses can add up. Thankfully, there are two different education tax credits which can assist in making higher education a little more affordable.
Worth up to $2,500 for each eligible student during the first four years of college, this credit can be claimed by either student or parent if the student is a dependent. Taxpayers will begin to see the credit phase out at income levels between $80,000 – $90,000 for those who file single, and $160,000-$180,000 for married, filing jointly.
Once you’ve reached the first four years of college, you may pick up the Lifetime Learning Credit, as it can be used for graduate level tuition. In addition to those courses, the LLC can be applied to classes designed to improve one’s skills or to acquire new skills for a job. That means it’s not dependent on a specific degree or certification, and can apply to courses after high-school.
This credit is worth 20% of the first $10,000 of tuition, capped at $2,000 per tax return. Like the AOC, this credit begins to phase out at higher income levels. Taxpayers with adjusted gross incomes between $50,000 and $60,000 filing single status ($100,000 – $120,000 married) see a reduced credit. You are only able to claim one Lifetime Learning credit per year, although there is no limit to how many years you can claim the credit for.