Lifetime Learning Credit

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Lifetime Learning Credit

The Lifetime Learning Credit (LLC) allows you to take up to a $2,000 credit on your Federal taxes depending on what educational expenses you paid for yourself, your spouse or your children. Unlike the American Opportunity Tax Credit (AOTC), the Lifetime Credit can be used for as long as you are in school. Another difference is that the LLC is not refundable. So, if you are eligible to take the full $2,000 credit, but you only actually owe $1,000 in taxes, you will not get a refund of the extra $1,000 as you might under the AOTC.

Can I take the Lifetime Learning Credit? If you meet the following criteria:

  • Your filing status is not married, filing separately
  • You are not listed as a dependent on someone else's (your parents, for instance) tax return
  • Your modified adjusted gross income (MAGI) is not more than $60,000 ($120,000 in the case of a joint return)
  • You (or your spouse) are not non-resident aliens for any part of 2011. For more info, see Publication 519, U.S. Tax Guide for Aliens.
  • You did not claim the American opportunity credit or a tuition and fees deduction for the same student in 2011.

How is the credit calculated? The credit is based on 20 percent of the first $10,000 of qualified educational expenses paid during the taxable year. Also, keep in mind that these expenses are those that are not being covered in another way (such as 529, Coverdell ESA, etc).

What expenses qualify for the Lifetime Learning Credit? Qualified tuition and related expenses, as well as books, supplies and equipment needed for your course of study.

What expenses do not qualify for the Lifetime Learning Credit?

  • Room and board
  • Transportation
  • Insurance
  • Medical expenses
  • Similar personal, living, or family expenses.

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