There are two tax credits available to help you offset the costs of higher education by reducing the amount of your income tax. They are the American Opportunity Credit and the Lifetime Learning Credit. Some general qualifications include:
American Opportunity Credit
You may be able to claim an American Opportunity Credit of up to $2,500 for qualified education expenses paid for each eligible student.
- Available ONLY if the student had not completed the first 4 years of postsecondary education
- Available ONLY for 4 tax years per eligible student (including any year(s) Hope credit was claimed)
- Student must be pursuing a program leading to a degree or other recognized education credential
- Student must be enrolled at least half time for at least one academic period that begins during the tax year
- Qualified Expenses: Tuition, required enrollment fees, and course materials that the student needs for a course of study
Lifetime Learning Credit
You may be able to claim a Lifetime Learning Credit of up to $2,000 for qualified education expenses paid for all eligible students.
- There is no limit on the number of years the lifetime learning credit can be claimed for each student
- Available for all years of postsecondary education and for courses to acquire or improve job skills
- Student does not need to be pursuing a program leading to a degree or other recognized education credential
- Available for one or more courses
- The University of Maine System will provide eligible students who attended during the year with an IRS Form 1098-T by February 1st for each tax year
- Additional information about your tuition and fee payments may be obtained from the the student’s account via MaineStreet
For each student, for any year, you can elect only one of the tax credits. If you are eligible to claim the lifetime learning credit and you are also eligible to claim the American opportunity credit for the same student in the same year, you can choose to claim either credit, but not both.
Whether a taxpayer may take advantage of these benefits depends on the taxpayer’s individual facts and circumstances. The preceding information is provided as information only and should not be relied upon for tax planning purposes. The University of Maine System cannot provide legal or tax advice on this matter. Complete details can be found in the IRS Publication 970 or consult with your own personal tax advisor.