Here is today's Tax Credit Check. Education credits can ease the financial burden of higher education for the entire family.
The American Opportunity Credit (AOTC) is a tax benefit available to a broader range of individuals and families, including many with higher incomes and those who owe no tax.
Check One: Many of those eligible qualify for the maximum annual credit of $2,500 per student. Up to 40 percent of this credit may be refundable.
Check Two: This credit is available for the first 4 years of a student's post-secondary education.
Check Three: For 2012, the full credit is available to individuals, whose modified adjusted gross income is $80,000 or less, or $160,000 or less for married couples filing a joint return. The credit is phased out for those with incomes above these levels.
The Lifetime Learning Credit is available for all years of postsecondary education and for courses to acquire or improve job skills. The student does not need to be pursuing a degree or other recognized education credential.
Check One: Maximum annual credit is up to $2000 per student for qualified education expenses paid at an eligible educational institution
Check Two: There is no limit on the number of years the lifetime learning credit can be claimed for each student.
Check Three: For 2012, the full credit is available to individuals, whose modified adjusted gross income is $52,000 or less, or $104,000 or less for married couples filing a joint return. The credit is gradually phased out for those with incomes above these levels.
The AOTC and Lifetime Learning Credits have this in common:
Check One: You must pay qualifying educational expenses for higher education for an eligible student (you, your spouse or a dependent for whom you can claim an exemption).
Check Two: You cannot claim both for the same student in the same year.
Check Three: The credit may be claimed by the parent or the student, but not by both. Students who are claimed as a dependent cannot claim the credit.
For more information, visit IRS.gov and use keywords "Education Credits."