Tag Archive for: 1098-T

Taxpayers should review the education tax credits before they file

Here is a useful article from the IRS Tax Tip 2024-67.

There are two education tax credits designed to help offset 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 take 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.

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, no matter how many students qualify.
  • 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.