The Lifetime Learning Credit
All the schools are back in session now, even the late starting colleges are nearing fall break and midterm territory. But not everyone who is going back is on their first time around. Many Americans return to higher education to learn new skills to help find employment or improve existing job-related skills. While many of them may not be eligible for the American Opportunity Credit, they may qualify for the Lifetime Learning Credit. This is a non-refundable credit of up to $2,000 on your tax return that can help offset some of the expenses.
To be eligible you must pay qualified education expense for higher education, be enrolled in an eligible institution, and not be another person’s dependent. You do not need to be pursuing a degree or credential and there are no minimum enrollment requirements. If you are going back to become handier with Excel for you job, that qualifies. The qualified expenses must be tuition and fees required for attendance. This means that books and supplies not required for enrollment are not eligible expenses.
If you are eligible and have eligible expenses (up to $10,000), those expenses are used to calculate how much of credit you can take on your return. There are some income limits that can reduce or phase out this credit. If you married filing jointly, your adjusted gross income (AGI) limit before phase out is $131,000 for tax year 2016. For Single, Head of Household, or Qualifying Widow(er), the AGI limit before phase out is $65,000 for tax year 2016. Married Filing Separately is not eligible for this credit. The AGI number maybe higher for 2017, but as of this posting, they are not available.
While this does not seem like much, it is at least something to help with an ever-changing economy and job market.
Please let us know if you have any questions.