I graduated from college a few years ago, but I signed up to take a few graduate classes part-time starting this fall. Can I qualify for the American Opportunity Credit?
You can only take the American Opportunity Credit for the first four years of postsecondary education, but you may be able to take the Lifetime Learning Credit, which can reduce your tax bill by up to $2,000 per return.
The credit is calculated as 20% of up to $10,000 of qualified expenses, which include tuition, fees and related course materials but not room and board. Unlike the rules for the American Opportunity Credit, you don’t need to be attending school at least half-time, and you don’t have to be pursuing a degree. But the classes must be taken at an educational institution that is eligible to participate in the U.S. Department of Education’s student-aid program, which includes colleges, universities, vocational schools and other postsecondary institutions. There’s no limit to the number of years that each student can claim the Lifetime Learning Credit.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
You can claim the credit for yourself, your spouse or your dependent. If you file your own tax return and are not dependent on any other taxpayer, you can claim the credit yourself. If your parents claim you as a dependent, they’re the ones who claim the credit. To qualify for the full credit in 2013, your modified adjusted gross income must be below $53,000 if you’re single or $107,000 if you’re married filing jointly. The size of the credit gradually phases out and disappears if you earn more than $63,000 if you are single or $127,000 if you are married filing jointly. These income limits are lower than those for the American Opportunity Credit.
For more information about both the Lifetime Learning and the American Opportunity credits, see IRS Publication 970, Tax Breaks for Education, and the IRS’s Tax Benefits for Education Information Center.
-
5 Tips for Investing in the Trump PresidencyWith Trump back in office, expectations are high the bull market will continue. Here's how investors can prepare.
-
Where to Retire: Living in Portugal as a US RetireeLiving in Portugal as a retirement landing spot has abundant advantages, but do your homework and due diligence first.
-
Gov. Hochul Vows to Deliver $1 Billion in Tax Relief to New YorkersState Tax The proposed tax cuts would benefit New York middle-class families.
-
Maryland Property Tax Assessment: What It Means for YouState Tax Amid a growing deficit, Maryland property values are rising. Here’s more of what to know.
-
The American Opportunity Tax Credit (AOTC): How Much Is It Worth?Tax Credits This tax break can help you offset $2,500 in qualifying expenses tied to your higher education. Here's what you need to know.
-
Does Your State Have a Child and Dependent Care Tax Credit?Child and Dependent Care Tax Credit Over two dozen states, plus the District of Columbia offer tax credits or deductions for working families.
-
What Is a Qualified Charitable Distribution (QCD)?Tax Breaks A QCD can lower your tax bill while meeting your charitable giving goals in retirement. Here’s how.
-
New Law Delivers Tax Breaks to Natural Disaster Victims, But Is It Enough?Tax Relief The legislation provides critical tax relief to thousands of natural disaster victims across the country.
-
Five Tax-Savvy Ways To Donate This Holiday SeasonCharitable Donations Food pantries, toy drives, and animal sanctuaries are popular ways to support others year-round.
-
Can Tariffs Make Childcare More Affordable?Tariffs President-elect Trump suggested tariffs can address the childcare crisis, but economists are doubtful.
