The Lifetime Learning Credit (LLC) applies to tuition and fees for undergraduate course work. A family can claim on its tax return a credit equal to 20 percent of $5,000 of tuition and fees.
When is this credit available?
This credit is available for course work beginning and paid for on or after July 1, 1998.
Are there any restrictions?
- The LLC has some restrictions that make it necessary for the student to consult a tax advisor or the IRS for a full understanding of the tax implications.
- Only course work beginning and paid for after July 1, 1998 is eligible for the credit.
- Tuition and fees eligible for the credit are reduced by scholarships, grants, employer-education assistance, and other tax-free tuition benefits.
- Tuition and fees paid with loans are eligible for the credit.
- Both the Hope Tax Credit and the LLC may not be claimed for the same student in a single year.
The credits phase out gradually for single taxpayers with an adjusted gross income (AGI) of more than $40,000 or married taxpayers with an AGI of more than $80,000.