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Between tuition, books, housing, and transportation, going to college is expensive.  The good news is your education expenses can make you eligible for a money-saving education tax credit when you file in 2022.  Tax credits reduce the amount of taxes you owe and, in some cases, produce a refund.  Here are the options that are available and what it takes to qualify.


American Opportunity Tax Credit (AOTC)

Taxpayers who qualify for the American Opportunity Tax Credit can save up to $2,500 per student on their tax return.  If the credit reduces your tax bill to zero, you can get up to $1,000 of the remaining portion back as a refund.  The AOTC can only be claimed by students or their parents during the first 4 years of college.  Qualifying expenses include tuition, enrollment fees, books, and other course related materials.  You cannot claim room and board or transportation costs.  The IRS has specific rules about who can claim the education tax credit.  To qualify, you must be:

  • Attending your first four years of post-secondary education
  • Enrolled at least part time in a college or vocational school
  • Pursuing a degree or other recognized credential
  • Have no felony drug convictions through the end of the tax year

To claim the full credit, your modified adjusted gross income (MAGI) must be $80,000 or less ($160,000 or less for married couples filing jointly).  If your MAGI falls between $80,000 – $90,000 ($160,000 – $180,000 for married filing jointly) then you can receive a reduced credit.  Anything higher and you won’t be eligible.


Lifetime Learning Credit (LLC)

The Lifetime Learning Credit can be claimed by taxpayers who took undergraduate, graduate or professional development courses.  The credit is worth up to $2,000 per tax return and there’s no limit on the number of years you can claim it.  To be eligible, you must be enrolled or taking classes at an eligible institution for at least one academic period.  For tax year 2020, your MAGI must be $59,000 or less ($118,000 for married filing jointly) to receive the full credit.  You’ll receive a reduced credit if your MAGI is between $59,000 – $69,000 ($118,000 – $138,000 for married filing jointly).  Anything higher and you no longer qualify.


How to claim your education tax credit

To claim the AOTC or LLC (you can’t claim both), you or your parents will need to file a tax return using the Form 1098-T which the school will provide by January 31st.  Once you have the form and the rest of your tax documents, you can do your taxes using  We’ll help you claim the appropriate education credit along with any other credits and deductions you deserve.  So, you get the biggest possible refund, guaranteed.



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