Tax Breaks for Higher Education Costs

If you, your spouse or your dependent(s) are taking college or vocational courses, you may qualify for a tax credit or deduction. Here are some of the qualifiers:



The American Opportunity Credit (AOTC):

  • Provides up to $2,500 per eligible student earning a degree or other recognized credential.
  • Can only use for the first four years at an eligible college or vocational school.
  • Students must be going to school at least half-time for at least one academic period that started during or shortly after the tax year.

The Lifetime Learning Credit (LLC):

  • Provides up to $2,000 per tax return, per year, no matter how many students qualify.
  • Available for all years of higher education, including classes for learning or improving job skills.

Tuition and Fees Deduction:

  • Provides up to $4,000.
  • Is claimed as an income adjustment (whether or not you itemize).
  • Only claimed for tuition and certain related expenses required for enrollment or attendance at eligible schools.

Some additional reminders:

  • Qualifying expenses must be claimed for the tax year you paid them.
  • You cannot claim the AOTC or LLC credits if someone else claims you as a dependent.
  • You cannot claim either the AOTC or LLC and the Tuition and Fees Deduction for the same student or for the same expense, in the same year.
  • Your income may reduce the amount of credits or deductions you can claim.
  • Always consult your tax advisor for qualifying credits or deductions.