Education credits: American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit (LLC)

Education credits help with the cost of higher education. They can reduce the amount of tax owed on your tax return or they may increase your refund. There are two education credits available.

• American Opportunity Tax Credit (AOTC) – partially refundable
• Lifetime Learning Credit (LLC) – non-refundable

You can claim only one of the credits per qualifying student. You can claim both the AOTC and LLC on the same return only if they are not for the same student and the same expenses. No double benefit is allowed.

Who can claim an education credit?

Use the Interactive Tax Assistant to check your eligibility.

Review the comparison chart below to quickly identify the criteria for each credit and their similarities and differences.

Eligibility Criteria	American Opportunity Credit (AOTC)	Lifetime Learning Credit (LLC)
Who is considered a student?	The student can be you, your spouse (if filing jointly) or a dependent claimed on your tax return.	The student can be you, your spouse (if filing jointly) or a dependent claimed on your tax return.
Where must the student be enrolled?	The eligible student must be enrolled at an eligible educational institution.	The eligible student must be enrolled at an eligible educational institution.
What number of courses must the student be enrolled?	The student must be enrolled at least half-time for at least one academic period1 that begins during 2025 (or the first 3 months of 2026 if the qualified expenses were paid in 2025.)	The student must be enrolled in one or more courses for at least academic period1 that begins during 2025 (or the first 3 months of 2026 if the qualified expenses were paid in 2025.).
What type of program is required to claim the credit?	The student must be pursuing a program leading to a degree or other recognized education credential.	The student must take a course to acquire or improve job skills. The student is not required to pursue a program leading to a degree or other recognized education credential.
What expenses qualify for the education credit?	Tuition and enrollment fees are qualified educational expenses. Additionally, course materials the student needs for a course of study are considered qualified education expenses, even if they are not paid to the school. See qualified education expenses for more information.	Tuition and enrollment fees are qualified educational expenses. However, course-related books, supplies, and equipment are considered qualified education expenses only if they are required to be paid directly to the school as a condition of enrollment or attendance. See qualified education expenses for more information.
Who must pay the qualified education expenses?	The education expenses must be paid by you, your spouse (if filing jointly), your dependent claimed on your return or a third-party payer2.	The education expenses must be paid by you, your spouse (if filing jointly), your dependent claimed on your return or a third-party payer2.
When is the student eligible to claim the credit?	AOTC is available ONLY if the student hasn’t completed the first 4 years of postsecondary education. The years do not have to be consecutive.	LLC is available for all years of postsecondary education and for any courses taken to acquire or improve job skills.
How many years is the credit available?	AOTC is available ONLY for 4 years per eligible student.	LLC is available for an unlimited number of tax years.
Can a convicted felons claim the credit?	The student cannot have been convicted of a state or federal felony for possessing or distributing a controlled substance.	Felony drug convictions do not make the student ineligible.
Is a taxpayer identification number (TIN) required?	You, your spouse (if filing jointly), and dependents claimed on the return must have a valid Social Security number (SSN), individual taxpayer identification (ITIN), or adoption taxpayer identification number (ATIN) by the due date of the return (including extensions)3.	The student must have a valid Social Security number (SSN), individual taxpayer identification (ITIN), or adoption taxpayer identification number (ATIN) by the due date of the return (including extensions)3.
Is the educational institution’s employer identification number (EIN) required?	You must provide the educational institutions EIN number on your Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits).	The educational institution’s employer identification number (EIN) is not required on your Form 8863.
What is the maximum allowable credit?	AOTC allows a credit up to $2,500 per eligible student. Qualified expenses used to calculate AOTC cannot exceed $4,000 per eligible student. 100% of the first $2,000 and 25% of the next $2,000.	LLC allows a credit up to $2,000 per return. LLC is 20% of the first $10,000 of qualified expenses paid for all students claimed on the return.
Is the credit refundable?	AOTC is partially refundable, 40%.	LLC is non-refundable.
Is there an income limit to qualify for the credit?	Your modified adjusted gross income must be less than $90,000, ($180,000 if married filing jointly).	Your modified adjusted gross income must be less than $90,000, ($180,000 if married filing jointly).

¹ Academic period - can be semesters, trimesters, quarters, or any other period of study such as a summer school session. The school determines academic periods. For schools that use clock or credit hours and do not have academic terms, the payment period may be treated as an academic period.

² Third-party payer – If someone else paid expenses for the student claimed on your return, the expenses are considered paid by you.

³ TIN issue date - If an ATIN or ITIN is applied for on or before the due date of a 2024 return (including extensions) and the IRS issues an ATIN or ITIN as a result of the application, the IRS will consider the ATIN or ITIN as issued on or before the due date of the return.

Who cannot claim an education credit?

You cannot claim an education credit if:

• You are claimed as a dependent on another tax return, such as your parent’s return.
• Your filing status is married filing separately.
• You (or your spouse) were a non-resident alien for any part of the year and did not choose to be treated as a resident alien for tax purposes (find more information in Publication 519, U.S. Tax Guide for Aliens).
• Your modified adjusted gross income (MAGI), is over $90,000 ($180,000 for joint filers).

For the American Opportunity Credit only: If items 1 (a, b, or c), 2, and 3 below apply to you, your allowed credit is used to reduce your tax as a nonrefundable credit only. You don't qualify for a refundable portion of the AOTC if:

1. You were:

   a. Under age 18 at the end of the tax year, or

   b. Age 18 at the end of the tax year and your earned income⁴ was less than one-half of your support, or

   c. Over age 18 and under age 24 at the end of 2024 and a full-time student and your earned income was less than one-half of your support.​​​​

2. At least one of your parents was alive at the end of the tax year.
3. You are filing a return as single, head of household, qualifying surviving spouse, or married filing separately for the tax year.

⁴ Earned income includes wages, salaries, professional fees, and other payments received for personal services actually performed. Additionally, earned income includes the part of any scholarship or fellowship grant that represents payment for teaching, research, or other services performed by the student that are required as a condition for receiving the scholarship or fellowship grant.

How to claim an education credit

Complete the Form 8863, Education Credit and attach it to your Form 1040 or 1040-SR, U.S. Income Tax Return.

To be eligible for an education credit, the law requires the student to have received Form 1098-T, Tuition Statement, from an eligible educational institution, domestic or foreign. Generally, students get the form from their school by Jan. 31.

If you received a Form 1098-T, this statement provides information that will help you figure your credit. The form will have an amount in Box 1 to show the amounts received during the year. However, the amount on Form 1098-T might be different from the amount you actually paid and are deemed to have paid. The form may not reflect the total or accurate amount of qualified education expenses you can claim. For information on what amount to claim, see qualified education expenses in Tax Benefits for Education, Pub. 970. Check the form to make sure it’s correct. If it isn’t correct or you don’t receive the form but should have, contact the institution.

If you didn’t receive Form 1098-T, you may still be eligible to claim a credit. Contact the school to request the missing form and keep documentation of the communication with the college requesting the Form 1098-T.

The institution isn't required to furnish Form 1098-T if the student:

• Is a qualified nonresident alien.
• Has qualified education expenses paid entirely with scholarships or under a formal billing arrangement.
• Is enrolled in courses for which no academic credit is awarded.

To claim a credit without Form 1098-T and you otherwise qualify, show that the student was enrolled at an eligible institution and substantiate the payment of the qualified tuition and related expenses.

How to prevent education credit errors

Make sure you’re qualified before claiming the credit and avoid common education credit errors. Keep copies of all documents you used to determine eligibility and the credit amount.

If we audit your return and find your claim is incorrect and you don’t have the documents to show you qualified, you:

• Must pay back the amount of the credit you received in error with interest.
• May also be charged an accuracy or a fraud penalty.
• Can be banned from claiming AOTC credit for 2 to 10 years.

If your AOTC claim was disallowed in a previous tax year, you may need to file Form 8862 PDF before claiming the credit in future tax years. See My credit was disallowed and now I want to claim it.

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