Education tax credits are government incentives designed to alleviate the financial burden of educational expenses for eligible taxpayers. These credits are typically aimed at individuals pursuing higher education.
In the United States, two prominent education tax credits are the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC).
The AOTC offering a maximum annual credit of $2,500 per eligible student, with up to $1,000 refundable, and the LLC providing a maximum annual credit of $2,000 per tax return, not refundable.
Individuals, their spouses, or their dependents enrolled at an eligible educational institution, meeting specific criteria, and facing income limits may qualify for the Education Tax Credit in the United States.
Qualified expenses for education credits include tuition, fees, course materials, books, supplies, equipment, and certain enrollment-related fees directly associated with attendance at an eligible educational institution.
To claim the Education Tax Credit, individuals should complete IRS Form 8863, providing details on qualified expenses, and then transfer the calculated credit amount to the designated section of their federal tax return.