College Student Tax Credits

College is an important part of your life, hopefully solidifying your path for the future. However, it comes at a price, and often students need all the help they can get. Thankfully, there are a two different tax credits that can alleviate some of the burden on your wallet as a student.

American Opportunity Tax Credit:

The American Opportunity Tax Credit (AOTC) applies to any student enrolled in their first four years of undergraduate study at an eligible college or vocational school. The student must be studying to earn a degree or a recognized certificate, and be enrolled at least half time for an entire academic period. This credit can be claimed up to $2,500 per eligible student, and is refundable up to $1,000. AOTC expenses can be tuition fees, books, supplies and other incidentals.

Lifetime Learning Credit:

Students who are enrolled in any level of higher education, including graduate and vocational classes. Unlike the AOTC, this credit is not refundable, but uses the same expenses to reduce the amount of your taxes by up to $2,000.

You can claim these credits if you, your spouse, or your dependent are an eligible student. To claim a student credit, file Form 8863 with your tax return. As a student, you will receive a Form 1098-T, Tuition Statement, which will report all the required information to claim the credits correctly.

You can’t claim both credits for the same expenses, and you also can’t be a dependent of anyone else to claim the credit yourself. There are income limitations that affect both credits as well.