Compare Education Credits

There are several differences and some similarities between the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC).  You can claim both 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 2018 Education Credits Comparison

Criteria AOTC LLC
Maximum credit or benefit Up to $2,500 credit per eligible student Up to $2,000 credit per return
Refundable or nonrefundable 40% of credit  Not refundable
Limit on MAGI* for married filing jointly  $180,000 $134,000 

 

Limit on MAGI* for single, head of household, or qualifying widow(er)

$90,000 $67,000
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 2018 All years of post secondary education and for courses to acquire or improve job skills
Number of tax years credit available 4 tax years per eligible student including any years former Hope credit claimed 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
Number of courses Student must be enrolled at least half time for at least one academic period beginning in 2018 Available for one or more courses 
Felony drug conviction No felony drug convictions as of the end of 2018 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 
Whom can you claim the benefit for?
  • You
  • Your spouse
  • Student you claim as a dependent on your return 
  • You
  • Your spouse
  • Student you claim as a dependent on your return
Who must pay the qualified expenses?
Payments for academic periods

Made in 2018 for academic periods beginning in 2018 or the first 3 months of 2019

    

Do I need to claim the credit on a schedule or form?

Yes, Form 8863, Education Credits

Form 8863 Instructions

Yes, Form 8863, Education Credits

Form 8863 Instructions

 


   

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.  If you file Form 1040, AGI is on line 7 and you add back the following:

  1. Foreign earned income exclusion,
  2. Foreign housing exclusion,
  3. Foreign housing deduction,
  4. Exclusion of income by bona fide residents of American Samoa, and
  5. Exclusion of income by bona fide residents of Puerto Rico.

If you need to adjust your AGI to find your MAGI, there are worksheets in the Publication 970 to help you.

Education Benefits Resources

 

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