Lifetime Learning Credit
Candlefocus EditorThe LLC differs from the American Opportunity Credit, which is only available to undergraduate students attending college for the first time. For example, if a parent or guardian pays for their student's tuition, the taxpayer is eligible to receive a tax credit based on the amount of tuition paid. This is a great way for students to save on their costs and for parents to pay for their children's education.
Unlike the American Opportunity Credit, which is limited to the first four years of college, the LLC can be used for up to ten years of any postsecondary education, including graduate and professional degrees. This makes it ideal for students who are taking coursework to better their job skills or pursue higher degrees. Additionally, taxpayers with modified adjusted gross incomes (MAGI) of $90,000 or less, or $180,000 or less if filing jointly, may take advantage of the Lifetime Learning Credit.
When considering if the LLC is right for them, taxpayers should look at their situation carefully. It is possible to have a MAGI that falls within the income limits for the LLC but not qualify for the full credit. This can be the case if the taxpayer does not owe any taxes. Nevertheless, the LLC can still provide partial relief from the rising costs of college tuition.
Overall, the LLC is a great option for people to reduce the costs of their education. It allows taxpayers to receive a tax credit up to $2,000 per return, regardless of which postsecondary courses they take. Although the LLC cannot be used to pay for the first four years of college, like the American Opportunity Credit, it is still a great option for those pursuing additional schooling after their first four years or for those already on a graduate or professional degree.