As an example, a taxpayer who can take the Child Tax Credit for two of their three children, the Child and Dependent Care Credit for one and the American Opportunity Credit
and the Credit for Other Dependents for their oldest child, and the Lifetime Learning Credit for their own continuing education could see nearly $10,000 come off their 2018 tax bill when they file their return in 2019.
Educational tax credits available for traditional and nontraditional students include the American Opportunity Credit
(AOC) and the Lifetime Learning Credit (LLC).
* The American opportunity credit
and lifetime learning credit are available for taxpayers who pay qualifying education expenses.
Depending on the criteria, a student may use the American Opportunity Credit
of up to $2,500 or the Lifetime Learning Credit of up to $2,000.
The American opportunity credit
was claimed on 12.1 million returns for a total of $10.7 billion, of which 7.3 million returns claimed a refundable amount totaling $6.1 billion, an increase of 54.3 percent from 2009.
American Opportunity Credit
: This is the most valuable.
American opportunity credit
is a per-student, partially-refundable tax credit.
Tip #10: Take advantage of the American Opportunity Credit
Among the others: the lifetime learning credit or the American Opportunity Credit
There are two types of credits: the American Opportunity Credit
, which is available through 2017 and is limited to the first four years of post-secondary education, and the Lifetime Learning Credit which provides credit for years after the first four years of post-secondary schooling and can be used for graduate studies.
The Lifetime Learning Credit and the American Opportunity Credit
, which is for degree or certificate programs only but allows up to $2,500 per student, per year, for the first four years of undergraduate school, cannot be claimed by the same person.
Current refundable tax credits for individuals include the additional child credit, the earned income credit, the health coverage credit, and the American opportunity credit
. If the tax credit "payment" is more than the tax owed, the taxpayer receives a net payment from the government--a refund of money he never paid in.