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How to Apply for the Lifetime Learning Credit

1.

Calculate the tuition and qualified expenses paid during the tax year for postsecondary education for yourself and all your dependents. Book and activity fees and supplies can qualify if you must pay them to attend classes.

2.

Verify that the school or educational organization is eligible. Almost all postsecondary programs are eligible, including private businesses.

3.

Multiply the total of tuition and qualified expenses by 20 percent. This is the amount of your credit to a maximum of $1,000. If your income is greater than $80,000 if you are married filing jointly, or if it is greater than $40,000 for other filing statuses, the credit will be limited or denied.

4.

Fill out parts 2 and 3 of Form 8863.

Tips and Warnings

  • Use the Hope Credit instead of the Lifetime Learning Credit if you qualify. It is bigger and better, but more restrictive.
  • You can use both the Hope and Lifetime Learning credits for different students during the same tax year if you qualify.
  • There is no minimum number of classes required in order to qualify for the Lifetime Learning Credit.
  • You can use this credit year after year if you qualify.
  • Claim the credit in the year in which expenses were paid, even if the classes are not until the following year.
  • The Lifetime Learning Credit is for the expenses of all students during the tax year. You cannot get two Lifetime Learning Credits in the same year.
  • You cannot use more than one credit or deduction for the same expenses.
  • If your income is greater than $50,000 - or if it is greater than $100,000 and you are married filing jointly - you cannot use the Lifetime Learning Credit.
  • Education credits are not available to anyone who is married filing separately.


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