Definition

• The Lifetime Learning credit is a tax break provided to assist with the cost of education, and up to $2,000 each year can be covered for any post-secondary type of education. This credit is available to taxpayers who are attending school at least part-time.
  
  

Eligibility

• Any student who is enrolled in one or more classes for credit that count towards a degree, or the acquisition of new job skills, may claim the Lifetime Learning credit. Classes may also qualify if a student has taken them to improve existing job skills. Students are eligible to take this credit if they file a tax return and are not claiming other educational credits on their tax return at the same time. If a student does not have enough income to file a tax return, their parents may claim the credit. A taxpayer's spouse may also claim the credit. There are income limits that apply. Taxpayers who make over $47,000 annually, or $94,000 if they file jointly, will only receive a partial Lifetime Learning credit, and once they make $57,000 individually, or $114,000 jointly, they will no longer be eligible for any of the credit.
  
  

Qualified Expenses

• Tuition and related expenses that qualify for coverage under the Lifetime Learning credit are the costs paid at most universities and colleges to enroll in or attend classes. This does not include room and board, student activity fees, insurance premiums or athletic fees. Covered courses must be part of the required classes for a post-secondary degree, or classes that a student is taking to acquire new job skills or improve existing ones. All covered expenses must be mandatory costs that need to be paid when enrolling or attending classes. Other costs, such as transportation, will not be covered even if they are necessary in order to attend class.
  
  

Getting Credit

• When a taxpayer takes the Lifetime Learning credit on their return, they will get a 20 percent tax credit for the first $10,000 they spend on eligible tuition and expenses. This reduces their total tax liability directly. Based on this calculation, each student is eligible for a maximum of $2,000 worth of tax credits each year. As long as a student is enrolled in at least one eligible course each year and stays within the required income limits, they may continue take the Lifetime Learning credit for an unlimited number of years.