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Many people are unaware of the provisions in the U.S. tax code for those that seek higher education. Because the government wants to encourage a more educated population (even for those that have been out of school for a while), there are certain credits available to offset your tax burden. One of the best known of the education credits is the Lifetime Learning Credit.
The Lifetime Learning Credit has been around for several years and is applicable toward higher education expenses from any college or university that is eligible for participation in financial aid through the U.S. Department of Education. This means almost every college and university in the country. The amount of the credit is $2000 per year per tax return and the number of years the credit can be claimed is unlimited.
Since this is a credit rather than a deduction, the Lifetime Learning Credit amounts to a dollar for dollar reduction in the qualified student (or parentâ€™s) tax liability. This can be a helpful aid in offsetting the rising costs of higher education.
Here are some further specifics about the Lifetime Learning Credit:
- The credit is available for you, your spouse, or a dependent that you claim an exemption for on your tax return.
- The credit is non-refundable, meaning it can only be applied toward taxes you paid during that year. If your tax liability is $0, there is no benefit in claiming the credit.
- The credit is available for all years of post-secondary education, as well as courses you may take to improve your skills or advance your career.
- There is no need to have a declared major or be pursuing a degree program to be eligible for this credit.
- The credit is only available to individuals with an adjusted gross income of $62,000 or less and married couples with an adjusted gross income of $124,000 or less.
With college tuition costs rising every year, $2000 may not seem like much these days but every little bit helps. So, if you are eligible, be sure to claim your Lifetime Learning Credit during tax time. If you are unsure about your eligibility, speak with a qualified tax professional for further information.