Education tax benefits may help with college costs


March 16, 2020

If you're paying higher education costs for yourself, a spouse or a dependent, you may be eligible to save some money with education tax credits or the Tuition and Fees Deduction.

Here are some facts about tax credits for higher education.

The American Opportunity Tax Credit (AOTC) is:

  • Worth a maximum benefit up to $2,500 per eligible student.
  • Only for the first four years at an eligible educational or vocational institution.
  • For students pursuing a degree or other recognized education credential.
  • Partially refundable. People can potentially get up to $1,000 back.

The Lifetime Learning Credit (LLC) is:

  • Worth up to $2,000 per tax return, per year, no matter how many students qualify.
  • Available for all years of postsecondary education and for courses to acquire or improve job skills.
  • Available for an unlimited number of tax years.

If you don't qualify for the AOTC or LLC, you may still benefit from the Tuition and Fees Deduction.

For a complete explanation of all education benefits, read IRS Publication 970, Tax Benefits for Education.