It’s obvious that paying for school, either through a student loan or out of pocket, is going to be expensive for you or your family. There are actually two credits available for this year that can help you get some of that money back, rather than sending more money to the IRS.
These credits are the American opportunity credit and the lifetime learning credit. In this article, we’ll talk about the lifetime learning credit, including who qualifies for it and how much it’s for, so if you’re in an institutions of higher education, make sure you’re paying attention.
Overview
The lifetime learning credit is a credit of up to $2,000 which is available to all eligible students. The best benefit of this credit is that there is no limit on how many years in a row a student can claim the credit, as long as they’re in school at the time.
The amount of your credit is usually controlled by how much income you have and the amount of taxes that you own. The credit is based on any education fees that you pay for yourself, your spouse or your dependent. You must have begun your enrollment in the beginning of 2012 or have been enrolled in higher education for the first three months of the year.
Limits
If you’re married and filing jointly, the income limit to qualify for this credit is $122,000. If you’re single, then your maximum income is $61,000. You must be attending at least one college course during the year to file for the credit. You cannot claim this credit if you are married, but filing separately.
Degree
This tax credit applies to anyone who is attending an institute of higher education. You do not need to be perusing a specific degree or have a concentration in a selected area to be eligible.
Residency
You must have been a legal resident of the United States for the entire year of 2012. If you were not a legal resident of the US for any part of the 2012 year, then you cannot qualify for the credit.
The lifetime learning credit may have some new changes as tax laws so often do. Any new changes can be found here,
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