Tax credits and deductions for education
Mapping Your Future offers the following tax information as a resource and a convenience to you. We review our site content regularly to ensure content is correct and up-to-date; however, you should not consider us to be qualified tax advisors. If you are uncertain about your rights and responsibilities, contact a qualified tax advisor or visit the Internal Revenue Service (IRS) website. IRS Publication 970 outlines the education tax benefits.
You can elect one of the credits below per student per tax year. (There are income limitations so you may not qualify).
- American Opportunity Credit
- For expenses incurred during the first four years of postsecondary education
- Up to $2,500 for qualified education expenses paid for each eligible student
- Student must be pursuing an undergraduate degree or other recognized education credential
- Student must be enrolled at least half-time for at least one academic period during the tax year
- Tuition and fees required for enrollment are included, as well as course-related books, supplies, and equipment, even if you did not purchase them from the school.
- The eligible student may be the taxpayer, his or her spouse, or a dependent claimed as an exemption on the tax return.
- Lifetime Learning Tax Credit
- You may claim a tax credit (up to $2,000 for most families) for education expenses incurred during all years of postsecondary education.
- Eligible students must be enrolled in at least one postsecondary course (undergraduate or graduate), or courses to acquire or improve job skills
- Tuition and related fees are included, but excluded are room, board, books, supplies and other living expenses, unless you were required to pay the fees to the school as a condition of enrollment or attendance.
- The student must be the taxpayer, the taxpayer's spouse, or a dependent for whom the taxpayer claims an exemption on their return
- This credit is figured on the basis of one credit per tax return, regardless of how many dependent students are involved.
- To assist with determining your credit, you should receive a 1098-T from the postsecondary school.
- College Tuition and Fees Deduction – expired as of December 31, 2020
- This deduction expired on December 31, 2020, but for the years 2018, 2019, and 2020, you could reduce your taxable income by up to $4,000 for undergraduate and graduate expenses, depending on your modified adjusted gross income.
- Student Loan Interest Deduction
- Allows eligible student loan borrowers to deduct up to $2,500 of interest paid.
- Loan must have been used to pay for tuition and/or other higher education expenses, which may include fees, room & board, books, supplies, or equipment.
- Student must have been enrolled at least half-time in a program that led to a degree, certificate or other recognized educational credential.