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Education Tax Credit

Education tax credit is for higher education costs. There are two main education tax credits; the Hope education tax credit and the Lifetime learning education tax credit. Below is information and faq on education tax credit as well as how to calculate education tax credit. We will first discuss common rules for both Hope education tax credit and Lifetime learning education tax credit.

Are education tax credits refundable tax credits?

No. Both education tax credits are not refundable tax credits.

Can I claim either education tax credit if I am married and filing separately?

No. If a taxpayer is married and filing separately, he or she cannot claim either of the education tax credits.

I am a dependent of another tax payer, can I claim an education tax credit?

No. A dependent cannot claim Hope education tax credit or Lifetime learning education tax credit.

Below are the rules for both Hope education tax credit and Lifetime learning education tax credit

An educational institution is generally:

    • any college, university, vocational school or other post-secondary educational institution eligible to participate in a Department of Education student aid program.
  • Income limits

The educational tax credits are reduced if the modified adjusted gross income is:

From
To
Tax filing status
$47,000 $57,000 Single, Head of household, qualifying widow(er)
$94,000 $114,000 Married filing jointly

If the modified adjusted gross income is more than $57,000 or $114,000 for married filing jointly then no education tax credits are allowed.

  • No double benefit allowed

If a deduction for higher education expenses is claimed on a federal tax return already, the education tax credit cannot be claimed for the same educational expenses.

Also, higher education expenses paid with a tax free scholarship or Pell grant cannot be used to claim the Hope or lifetime learning credit.

The taxpayer can claim education credit for expenses paid with a dependent's earnings, loans, gifts, inheritances and personal savings.

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