The Hope credit and the lifetime learning credit are tax credits
that may be available to you if you pay higher education costs. This
chapter discusses the lifetime learning credit. The Hope credit is
discussed in chapter 1 of this publication.
The following table summarizes the differences between the Hope and
lifetime learning credits. If you are eligible to claim both credits
based on the higher education expenses of one student, it will
generally be to your benefit to claim the Hope credit.
Comparison of Education Credits
This chapter explains:
- Who can claim the lifetime learning credit,
- What expenses qualify for the lifetime learning credit,
and
- How the lifetime learning credit is computed and
claimed.
What is the tax benefit of the lifetime learning credit?
You may be able to claim a lifetime learning credit of up to $1,000
for qualified tuition and related expenses paid for all
students enrolled in eligible educational institutions. There is no
limit on the number of years for which the lifetime learning credit
can be claimed for each student.
A tax credit reduces the amount of income tax you may have to pay.
Unlike a deduction, which reduces the amount of income subject to tax,
a credit directly reduces the tax itself.
Credit more than tax.
Your lifetime learning credit cannot be more than the amount of
your tax. Therefore, you cannot get a refund for any part of the
credit that is more than your tax.
Can you claim both education tax credits this year?
For each student, you can elect for any year only one of
the credits. For example, if you elect to take the lifetime learning
credit for a child on your 2000 tax return, you cannot, for that same
child, also claim the Hope credit for 2000.
Lifetime learning credit after Hope credit.
You can claim the Hope credit for the first 2 years of an eligible
student's postsecondary education and claim the lifetime learning
credit for that same student in later years.
Tax credits for more than one student.
If you pay qualified expenses for more than one student in the same
year, you can choose to take credits on a per-student, per-year basis.
This means that, for example, you can claim the Hope credit for one
student and the lifetime learning credit for another student in the
same year.
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