Lifetime Learning Credit

Taxpayers may be eligible to claim a nonrefundable Lifetime Learning Credit against their federal income taxes. The Lifetime Learning Credit may be claimed for the qualified tuition and related expenses of the students in the taxpayer's family (i.e. the taxpayer, the taxpayer's spouse, or an eligible dependent) who are enrolled in eligible educational institutions. The amount that may be claimed as a credit is equal to 20 percent of the taxpayer's first $10,000 of out-of-pocket qualified tuition and related expenses for all the students in the family.

If the taxpayer is claiming an American Opportunity Credit for a particular student, none of that student's expenses for that year may be applied toward the Lifetime Learning Credit. The amount a taxpayer may claim as a Lifetime Learning Credit is gradually reduced for taxpayers who have modified adjusted gross income between $50,000 ($100,000 for joint filers) and $60,000 ($120,000 for joint filers). Taxpayers with modified adjusted gross income over $60,000 ($120,000 for joint filers) may not claim a Lifetime Learning Credit. The modified adjusted gross income limitation is indexed for inflation. The definition of modified adjusted gross income is the same as it is for purposes of the American Opportunity Credit. See www.irs.gov/pub/irs-pdf/p970.pdf for additional information.