Educational Tax Credit

Hope Credit

The Hope Credit helps parents and students pay for post-secondary education. The Hope Credit is a nonrefundable credit. This means that it can reduce your tax to zero, but if the credit is more than your tax the excess will not be refunded to you. The Hope Credit you are allowed may be limited by the amount of your income and the amount of your tax. The Hope Credit is for the payment of the first two years of tuition and related expenses for an eligible student for whom the taxpayer claims an exemption on the tax return. For more information, on the Hope Credit, please contact the Internal Revenue Service or your tax preparer.

Lifetime Learning Credit

Taxpayers may be able to claim a lifetime learning credit of up to $2,000 for qualified education expenses paid for all students enrolled in eligible educational institutions. There is no limit on the number of years the lifetime learning credit can be claimed for each student. However, a taxpayer cannot claim American Opportunity Credit, Hope Credit and Lifetime Learning Credits for the same student in one year. If you pay qualified education expenses for more than one student in the same year, you can choose to take credits on a per-student, per-year basis. For more information, on the Lifetime Learning Credit, please contact the Internal Revenue Service or your tax preparer.

American Opportunity Credit

The American Opportunity Credit makes tax credit benefits available to a broader range of taxpayers, including many with higher incomes and those who owe no tax. In additional to direct educational costs, the AOTC, also adds required course materials to the list of qualifying expenses and allows the credit to be claimed for four post-secondary education years with maximum annual credit of $2,500 per student. For more information on the American Opportunity Credit, please contact the Internal Revenue Service or your tax preparer.

Please visit the IRS Information Center for additional information.