What is the Lifetime Learning Credit?
The Lifetime Learning Credit (LLC) is a beneficial educational tax credit available to eligible taxpayers in the United States. This credit is designed to help offset the cost of qualified tuition and related expenses incurred for higher education. Unlike the American Opportunity Credit, which is limited to the first four years of post-secondary education, the LLC can be claimed for an unlimited number of years, making it ideal for both degree-seeking students and those pursuing lifelong learning through courses.
Eligibility
To qualify for the LLC, taxpayers must meet specific criteria. This includes having an adjusted gross income (AGI) below $69,000 for single filers or $138,000 for married couples filing jointly (for the tax year 2022). Both undergraduate and graduate students can benefit from the LLC, and there is no requirement for half-time enrollment.
Credit Amount
The LLC allows taxpayers to claim up to 20% of the first $10,000 in qualified education expenses, resulting in a maximum credit of $2,000 per tax return, regardless of the number of students in the household. It's important to note that the credit is non-refundable, meaning it can reduce tax liability to zero but will not result in a refund.
Claiming the Credit
Taxpayers need to fill out IRS Form 8863 to claim the LLC and provide necessary documentation of expenses. Keeping records of receipts and records of enrollment is essential to support the claim during tax filing.