There are several differences and some similarities between the AOTC, American Opportunity Tax credit, the LLC, Lifetime Learning credit and the Tuition and Fees deduction. You can claim all three benefits on the same return but not for the same student or same qualified expenses. See "No Double Benefit Allowed" for more information on claiming one or more education benefits.
Tax Year 2017 Education Credits and Tuition Deduction Comparison
|Criteria||AOTC||LLC||Tuition and Fees Deduction|
|Maximum credit or benefit||Up to $2,500 credit per eligible student||Up to $2,000 credit per return||Up to $4,000 taxable income reduction per return|
|Refundable or nonrefundable||40% of credit||Not refundable||Does not apply|
|Limit on MAGI* for married filing jointly||$180,000||$128,000||$160,000|
Limit on MAGI* for single, head of household, or qualifying widow(er)
|Can you file married filing separately?||No|
|Dependent status||Cannot claim credit if you are claimed as a dependent on someone else's return|
|Must you or your spouse be a U.S. Citizen or Resident Alien?||Yes, unless nonresident alien is treated as resident alien for tax purposes (see Publication 519 for information on nonresident alien status)|
|Number of years of post-secondary education available||Only if student hasn't completed 4 years of post secondary education before 2017||All years of post secondary education and for courses to acquire or improve job skills||All years of post secondary education|
|Number of tax years credit available||4 tax years per eligible student including any years former Hope credit claimed||Unlimited||Unlimited|
|Type of program required||Student must be pursuing a degree or other recognized education credential||Student does not need to be pursuing a degree or other recognized education credential||Student must be enrolled at eligible educational institution for one or more courses|
|Number of courses||Student must be enrolled at least half time for at least one academic period beginning in 2017||Available for one or more courses||Available for one or more courses at eligible educational institution|
|Felony drug conviction||No felony drug convictions as of the end of 2017||Does not apply||Does not apply|
|Qualified expenses||Tuition, required enrollment fees and course materials needed for course of study||Tuition and fees required for enrollment or attendance||Tuition and fees required for enrollment or attendance|
|Whom can you claim the benefit for?||
|Who must pay the qualified expenses?||
|Payments for academic periods||
Made in 2017 for academic periods beginning in 2017 or the first 3 months of 2018
|Do I need to claim the credit or deduction on a schedule or form?||Yes, Form 8917, Tuition and Fees Deduction|
ˆ Third Party-Qualified education expenses paid by a third party for you or your student claimed as a dependent on your return are considered paid by you for the AOTC and LLC. Payments by third parties include amounts paid by relatives or friends.
* MAGI, modified adjusted gross income, for most people is the amount of AGI, adjusted gross income, shown on your tax return. On Form 1040A, AGI is on line 22 and is the same as MAGI. If you file Form 1040, AGI is on line 38 and you add back the following:
- Foreign earned income exclusion,
- Foreign housing exclusion,
- Foreign housing deduction,
- Exclusion of income by bona fide residents of American Samoa, and
- Exclusion of income by bona fide residents of Puerto Rico.
To compute MAGI for the Tuition and Fees deduction, you compute the MAGI before putting any amounts on Form 1040A line 19 (tuition and fees) or Form 1040, line 34 (tuition and fees) or line 35 (domestic production activities deduction).
If you need to adjust your AGI to find your MAGI, there are worksheets in the Publication 970 to help you.
Education Benefits Resources
- Education Credits
- What You Need to Know about AOTC and LLC
- Education Credit Products
- Tax Benefits for Education: Information Center
- Publication 970, Tax Benefits for Education
- Department of Education website