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 (AOTC).
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.
