IRS Tax Tip 2025-23, April 3, 2025
There are two tax credits designed to help taxpayers reduce education costs: the American Opportunity Tax Credit and the Lifetime Learning Credit.
Eligibility requirements
For both tax credits, to be eligible:
- The taxpayer, their spouse or their dependents must have taken post-high school coursework in tax year 2024.
- The student must have a Form 1098-T, Tuition Statement, from an eligible educational institution. There are exceptions for some students PDF.
Things taxpayers should know about the education tax credits
The American Opportunity Tax Credit is:
- Worth a maximum benefit of up to $2,500 per eligible student.
- Available only for the first four years at an eligible college or vocational school.
- For students pursuing a degree or other recognized education credential.
- Partially refundable. People could get up to $1,000 back.
The Lifetime Learning Credit is:
- Worth a maximum benefit of up to $2,000 per tax return, per year.
- Available for all years of postsecondary education and for courses to acquire or improve job skills.
- Available for an unlimited number of tax years.
Claiming the credits
To claim either credit, taxpayers must complete Form 8863, Education Credits, and file it with their federal tax return.