J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

33.7 Education Tax Credits

For 2012, there are two tax credits for higher education tuition and qualified fees: The American Opportunity credit and the lifetime learning credit. Both credits are figured on Form 8863. You may not claim both credits for the same student for the same year.

The maximum American Opportunity credit is $2,500 per eligible student for qualified expenses in the first four years of post-secondary education. 40% of the credit is generally refundable, meaning that it is allowed even if it exceeds your tax liability. See 33.8 for details on the American Opportunity credit.

Unlike the American Opportunity credit, the Lifetime Learning credit may be claimed for higher education costs beyond the fourth year of post-secondary education and for non-degree courses that enable the student to acquire or improve job skills. Only tuition and fees/expenses required for enrollment or attendance qualify. The maximum Lifetime Learning credit is $2,000 annually, regardless of how many students you pay expenses for. See 33.9 for details on the Lifetime Learning credit.

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Law Alert

Law Needed to Extend American Opportunity Credit Beyond 2012

Under current law, the American Opportunity credit is scheduled to apply only through 2012. Any update will be in the e-Supplement at jklasser.com .

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A phaseout rule based on modified adjusted ...