Education Credits Aren’t Just for Children’s Tuition

Article Highlights:

  • Overview

  • Eligible Education Expenses

  • Credit Qualifications

  • American Opportunity Credit

  • Lifetime Learning Credit

  • Qualifications

  • Who Gets the Credit

If you think that education credits are just for sending your children to college, think again; the credits are available to you, your spouse (if you are married), and your dependents. Even if you or your spouse only attend school part time, you still may qualify for a tax credit.

There are two education-related tax credits available: the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). For either credit, the student must be enrolled in an eligible educational institution for at least one academic period (semester, trimester or quarter) during the year. An eligible educational institution is any accredited public, nonprofit, or proprietary postsecondary institution that can participate in the U.S. Department of Education’s student aid programs.

The credits phase out for higher-income taxpayers who are married filing jointly (MFJ) or who are unmarried. Those who are married filing separately (MFS) do not qualify for either credit.

Eligible Expenses – The following table defines the eligible and ineligible expenses that are used in determining the education expenses. This table illustrates the differences between expenses that qualify for the AOTC and the LLC.

ELIGIBLE EDUCATION EXPENSES

EXPENSE

NOTES

AOTC

LLC

Computer

If needed for attendance at the educational institution.

See Notes

No

Computer Software

If needed for attendance at the educational institution. Sports, games, hobbies only if educational in nature.

See Notes

No

Course Materials and Supplies

For the LLC only if purchased from the institution as a condition of attendance.

Yes

See Notes

Equipment

Required for enrollment or attendance.

Yes

No

Fees

Required for enrollment or attendance.

Yes

Yes

Fees, Non-Academic

Only if they are required to attend.

Yes

Yes

Fees, Student Activity

Paid to the educational institution.

Yes

Yes

Internet Service

If needed for attendance at the educational institution.

Yes

No

Travel Expenses

-

No

No

T