How to Use the Lifetime Learning Credit to Gain New Skills

Aug 22, 2023 1 min read

Whether you’re sending kids off to college, pursuing a graduate degree to boost your salary or just looking to broaden your horizons during retirement, the lifetime learning credit can help offset some of your higher education expenses. Read on to learn how it works and find out if you qualify.   

The Lifetime Learning Credit: Your Questions Answered

As with anything tax-related, there are a variety of different rules, limits and requirements tied to taking advantage of the lifetime learning credit. Here’s what you need to know.

What Is the Lifetime Learning Credit?

According to the IRS, the lifetime learning credit (LLC) is for qualified tuition, fees and related expenses paid for eligible students enrolled in an eligible educational institution. This credit can help pay for undergraduate, graduate and professional degree courses — including courses to acquire or improve job skills. 

How Much Is the Lifetime Learning Credit Worth?

If you or your dependent meet the requirements, the maximum lifetime learning credit is $2,000 per tax return. The best part? There is no limit on the number of years you can claim the LLC, so no matter how long your education program lasts, you can count on receiving the credit all the way through. 

What Are the Lifetime Learning Credit Requirements?

There are a few different criteria that must be met in order to claim the lifetime learning credit. 

To claim it on your tax return, you must meet all three of the following:

  • You, your dependent or a third party pay qualified education expenses for higher education.
  • You, your dependent or a third party pay the education expenses for an eligible student enrolled at an eligible educational institution.
  • The eligible student is yourself, your spouse or a dependent you listed on your tax return.

To be eligible, the student must:

  • Be enrolled or taking courses at an eligible college, university or vocational institution.
  • Be taking higher education course or courses to get a degree or other recognized education credential or to get or improve job skills.
  • Be enrolled for at least one academic period beginning in the tax year.

What Are the Income Limits for the Lifetime Learning Credit?

As of tax year 2022, the amount of credit you can receive is gradually reduced if your modified adjusted gross income is between $80,000 and $90,000 ($160,000 and $180,000 if you file a joint return). If your income is over $90,000 ($180,000 for joint returns), you can’t claim the credit. Visit Am I Eligible to Claim an Education Credit? to find out if you qualify to claim an education credit.

Take the Stress Out of Tax Season

Taking the implications of your choices into account while creating and reviewing your financial plan can help you make informed, efficient investment decisions. A Farm Bureau financial advisor can help — schedule a meeting today.

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