College Tax Credits

The IRS recently released a reminder that now is a good time for parents and students to check and see what college tax credits they might be eligible for in the 2014 calendar year.  There are two college tax credits: the American Opportunity Credit and the Lifetime Learning Credit.

American Opportunity Credit:

• Maximum credit is $2,500 per student.
• Students can claim the credit for qualified education expenses paid during the tax year.
• Credit is only available for 4 years per eligible student.
• Credit is available only if the student has not completed the first 4 years of postsecondary education before 2014.
• Subject to income limits.

Lifetime Learning Credit:

• Maximum credit of $2,000 per return.
• Graduate and undergraduate students can qualify but the maximum credit is $2,000 per return, not per student, like the American Opportunity Credit.
• Tuition and fees required for enrollment or attendance qualify as do other fees for the course. Additional expenses do not.
• Subject to income limits.

For more information and to find out what education credits you may qualify for please click on the link for the IRS Press Release regarding college tax credits.