You can’t take more than one education benefit for the same student and the same expenses. So, you can't take the AOTC and LLC for the same student in the same tax year. Also, if you receive tax-free educational assistance, such as a grant, you need to subtract that amount from your qualified education expenses.
Adjustments to qualified education expenses
(This brief description of adjusting educational expenses is a broad overview. If you or your student fall under any of the listed categories, we suggest you consult Publication 970, Tax Benefits for Education, for more information)
Generally, for each student, you:
Examples of tax-free educational assistance include:
What Funds Do Not Reduce My Qualified Education Expenses?
You don’t need to reduce your qualified education expenses by amounts paid with the following:
See Publication 970,Tax Benefits for Education, for examples of reporting scholarships or fellowships as income.
Finding the Best Education Benefit for You
We want you to take the education benefit that helps you the most. Generally, a credit that reduces your tax or increases your refund is the best. Look at all your options and see what helps you the most.
Also, you can consider including a tax-free scholarship, fellowship or grant to your student’s income and then taking the full amount of the education credit. Refer to Publication 970,Tax Benefits for Education, for more information.
Use our interactive app to help you find out if you can claim an education credit - Am I Eligible to Claim an Education Credit?
Refund of Qualified Education Expenses
See Publication 970,Tax Benefits for Education, for information on what to do if you receive a refund of qualified education expenses during the tax year.
Information for Schools, Community and Social Organizations on our Refundable Credits Toolkit
Tax Preparer Due Diligence Information on our Tax Preparer Toolkit
Watch out for these common errors made when claiming education credits
Find more answers to the questions you ask about the education credits
More education benefit resources
Technical Forms and Publications