The landscape · Education
The Lifetime Learning credit
The Lifetime Learning credit returns 20 percent of up to a set amount of tuition and fees per return each year, for any level of study and any number of years.
Who this exists for. This exists for a student at any level, including graduate school and single courses for job skills, with no limit on the number of years. Ticks that show it: I or a dependent is in college or training; I work for an employer; I support a dependent (a child in college, a parent, another adult).
How it works
The credit is 20 percent of the first this year's official llc expense cap (not yet verified here; see the official source below) of qualified expenses paid for the year, for a maximum of this year's official llc max credit (not yet verified here; see the official source below) per tax return, not per student. Qualified expenses are tuition and required fees, and books only when they must be bought from the school. There is no half time requirement, no degree requirement, and no limit on the number of years, so a single evening course to improve job skills counts. It is not refundable, so it only reduces tax owed. It phases out over the same income range as the American Opportunity credit, this year's official aotc phaseout single start (not yet verified here; see the official source below) to this year's official aotc phaseout single end (not yet verified here; see the official source below) for single filers, with doubled lines for joint filers. The same student cannot get both credits in one year, but a family can use one credit for one student and the other for another.
What it gives
It works for graduate school, part time study, and single courses with no year limit.
No degree program or half time enrollment is required.
It covers a student who has already used four years of the other credit.
What it costs, or where the catch is
It is capped per return, so two students in the family share one credit.
It is not refundable, and a family with no tax owed receives nothing.
Books bought outside the school do not count, unlike with the other credit.
A worked example
Idris works full time and pays $4,800 for two graduate courses in the spring and fall. The credit is 20 percent of his expenses, which is $960, since $4,800 times 0.20 is $960. His tax before credits is $5,100, so it drops to $4,140. Had he paid $12,000 for a full year of graduate school, the credit would stop at the per return cap rather than growing further.
Where it goes wrong
The common miss is claiming this credit for a freshman who qualified for the larger American Opportunity credit, which the software does not always catch.
Who confirms it for you
For your own numbers, a CPA or enrolled agent. This page explains how the rule works for people in general; it does not know your situation and does not tell you what to do.
The official source
IRS: Lifetime Learning Credit. Every figure that changes by year comes from the site's rules table, which the watcher checks against the official page on a schedule; where a figure is not yet verified, this page says so instead of printing a number.
Ask about The Lifetime Learning credit
A model reads this page and answers from it. It will say when the answer is not on the page. Education, not personalized advice.
Nearby doors
- The employer match
This exists for anyone whose job offers a retirement plan with matching contributions.
- Traditional 401(k) contributions from pay
This exists for anyone whose employer offers a 401(k) plan and who wants to know what happens when part of a paycheck goes into it.
- The Roth 401(k) option inside the plan
This exists for a worker whose 401(k), 403(b), or 457(b) plan offers a designated Roth account alongside the traditional one.
- The 403(b) for schools and nonprofits
This exists for people who work at public schools, colleges, hospitals, churches, and other nonprofit employers that offer a 403(b) plan.
- The 457(b) and its separate limit
This exists for state and local government workers and some nonprofit employees whose employer offers a 457(b) deferred compensation plan.
- Vesting schedules
This applies when an employer puts money into a worker's retirement plan and the plan document says that money becomes the worker's over time.
Education, not advice. Wealthy Habitat explains how rules work and never recommends what to do with your money. The No Advice Disclosure.