What is the Lifetime Learning Credit?
The Lifetime Learning Credit (LLC) is a tax credit designed to help individuals offset the costs of higher education. Unlike other education credits, the LLC is available for any level of post-secondary education, and it can be claimed for any number of years, making it particularly beneficial for non-traditional students and those pursuing continuing education.
Eligibility
To qualify for the LLC, taxpayers must meet certain criteria:
- Must be enrolled in an eligible educational institution.
- Can claim credit for qualified tuition and related expenses.
- Income limits apply; for example, the credit begins to phase out at modified adjusted gross incomes of $59,000 for single filers and $118,000 for married couples filing jointly (as of tax year 2023).
Credit Amount
The LLC allows taxpayers to claim a credit of up to 20% of the first $10,000 spent on qualified education expenses, resulting in a maximum annual credit of $2,000 per tax return. It's important to note that this credit is non-refundable, meaning it can reduce the tax liability to zero but not result in a refund.
How to Claim
Taxpayers can claim the LLC by filing Form 8863 with their federal income tax return. Proper documentation, such as Form 1098-T from the educational institution, is necessary to substantiate eligibility and expenses.
In conclusion, the Lifetime Learning Credit is a flexible and valuable resource for those looking to advance their education while managing financial burdens.