What's the education credit income limit? (2024)

FAQs

What's the education credit income limit? ›

Taxpayers with a modified adjusted gross income of $80,000 or less ($160,000 or less for joint filers) are potentially eligible for the full credit and the credit is reduced ratably up for modified adjusted gross incomes up to $90,000.

For the American Opportunity Credit the education credit income limit is as follows: Single, head of household, or qualifying widow(er) — $80,000-$90,000. Married filing jointly — $160,000-$180,000.

More In Credits & Deductions

The American opportunity tax credit (AOTC) is a credit for qualified education expenses paid for an eligible student for the first four years of higher education. You can get a maximum annual credit of $2,500 per eligible student.

Be pursuing a degree or other recognized education credential. Have qualified education expenses at an eligible educational institution. Be enrolled at least half time for at least one academic period* beginning in the tax year. Not have finished the first four years of higher education at the beginning of the tax year.

Who cannot claim an education credit? You cannot claim an education credit when: Someone else, such as your parents, list you as a dependent on their tax return. Your filing status is married filing separately.

There are income limits for the AOTC. The credit phases out from a modified adjusted gross income (MAGI) of $80,000 to $90,000 for a single taxpayer, head of household, or qualifying widow(er) ($160,000 to $180,000 for married filing jointly).

The Lifetime Learning Tax Credit is not available when: The taxpayer claimed the AOTC during the same tax year. The taxpayer pays for college expenses for someone who is not a dependent. The taxpayer files federal income tax returns as married filing separately.

You can claim a tax credit for your college tuition, or your dependent child's college tuition, either through the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit (LLC).

Benefits of Claiming a College Student as a Dependent

In addition to tax credits, deductions like the student loan interest deduction may be available. Altogether, these tax benefits have the potential to save you thousands of dollars, which can in turn help pay for your child's education.

What would disqualify you from claiming the American Opportunity Credit? ›

You can't take the AOTC if any of the following apply: Your filing status is married filing separately (MFS). You are claimed as a dependent on another person's tax return (such as the taxpayer's parents' return).

Taxpayers with a modified adjusted gross income of $80,000 or less ($160,000 or less for joint filers) are potentially eligible for the full credit and the credit is reduced ratably up for modified adjusted gross incomes up to $90,000.

The American Opportunity Tax Credit (AOTC) is a partially refundable tax credit that provides up to $2,500 per student per year to pay for college. The tax credit is based on up to $4,000 in eligible higher education expenses, equal to 100% of the first $2,000 in eligible expenses and 25% of the second $2,000.

The student must be enrolled or taking courses at an eligible education institution. The student must be taking a higher education course or courses to get a degree or other recognized education credential or to get or improve job skills.

Calculating the American Opportunity Tax Credit

The credit amount is equal to: 100% of the first $2,000 of qualified expenses plus 25% of the expenses in excess of $2,000. The maximum annual credit per student is $2,500.

You are not able to claim any education credits for a non-dependent child. To be able to claim education credit, the student in question must be a dependent claimed as an exemption on your tax return.

Generally, the PISA and the NLSCY data support the conclusion that income or SES has important effects on educational attainment in elementary school through high school.

The student and/or the person able to claim the student as a dependent meets all other eligibility requirements to claim the credit, The student can show he or she was enrolled at an eligible educational institution, and. You can substantiate the payment of qualified tuition and related expenses.

Share: You can use education payments made by your parents or third parties to claim tuition tax credits if both of these are true: You're a student. You qualify to claim an education credit.