Lifetime Learning Credit

The Lifetime Learning Credit, provided by 26 U.S.C. § 25A(b), is available to taxpayers who have incurred education expenses. For this credit to be claimed by a taxpayer, the student must attend school on at least a part-time basis. The credit can be claimed for education expenses incurred by the taxpayer, the taxpayer’s spouse, or the taxpayer’s dependent.

This credit allows for a 20% tax credit for first $10,000 of qualified tuition and expenses to be fully creditable against the taxpayer’s total tax liability. The maximum amount of the credit is $2000 per eligible student. The credit is available for net tuition and fees (less grant aid) paid for post-secondary enrollment. The credit is available on a per-taxpayer (family) basis, and is phased out at the same income levels as the Hope Scholarship Credit. The Lifetime Learning Credit is subject to some limitations. A taxpayer may not take both a Hope credit and a Lifetime Learning Credit for the same student in the same year. The credit is subject to a limitation designed to reserve the benefit to low to moderate income taxpayers. The credit amount is phased out gradually once a taxpayer’s gross income exceeds $47,000, and the credit is phased out entirely once a taxpayer’s gross income exceeds $57,000. These numbers are increased for taxpayers who file jointly to $94,000 and $114,000 respectively.

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