For more information, visit IRS Publication 970 Tax Benefits for Education.

American Opportunity Credit

Who Can Claim the Credit?

Generally, you can claim the American opportunity credit if all three of the following requirements are met.

• You pay qualified education expenses of higher education.
• You pay the education expenses for an eligible student.
• The eligible student is either yourself, your spouse, or a dependent you claim on your tax return.

NOTE Qualified education expenses paid by a dependent you claim on your tax return, or by a third party for that dependent, are considered paid by you.

Either you or your dependent (but not both) can claim the American Opportunity Credit

• If you claim the student as a dependent, only you can claim the credit. Treat any expenses paid by your dependent as paid by you.
• If you do not claim the student as a dependent, the student can claim the education credit. The student can use expenses you or anyone else pays for education expenses on his or her behalf.

Who Is an Eligible Student?

To claim the American opportunity credit, the student for whom you pay qualified education expenses must be an eligible student. An eligible student is one which meets all of the following requirements:

• The student has not claimed the American Opportunity Tax Credit (or the former Hope Credit) for more than four tax years.
• The student had not completed the first four years of postsecondary education as of the beginning of the tax year.
• For at least one academic period beginning during the tax year (or during the first three months of the following year if the qualified expenses were paid during the tax year), the student was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential.
• The student had not been convicted of a federal or state felony drug offense as of the end of the tax year.

Expenses Paid by Dependent

If you claim on your tax return an eligible student who is your dependent, treat any expenses paid (or deemed paid) by your dependent as if you had paid them. Include these expenses when figuring the amount of your American opportunity credit.

TIP Qualified education expenses paid directly to an eligible educational institution for your dependent under a court-approved divorce decree are treated as paid by your dependent.

Expenses Paid by You

If you claim a dependent who is an eligible student, only you can include any expenses you paid when figuring the amount of the American opportunity credit. If neither you nor anyone else claims the dependent, only the dependent can include any expenses you paid when figuring the American opportunity credit.

Lifetime Learning Credit

Who Can Claim the Credit?

Generally, you can claim the Lifetime Learning Credit if all three of the following requirements are met.

• You pay qualified education expenses of higher education.
• You pay the education expenses for an eligible student.
• The eligible student is either yourself, your spouse, or a dependent you claim on your tax return.

Either you or your dependent (but not both) can claim the Lifetime Learning Credit

• If you claim the student as a dependent, only you can claim the credit. Treat any expenses paid by your dependent as paid by you.
• If you do not claim the student as a dependent, the student can claim the education credit. The student can use expenses you or anyone else pays for education expenses on his or her behalf.

Who Is an Eligible Student?

For purposes of the Lifetime Learning Credit, an eligible student is a student who is enrolled in one or more courses at an eligible educational institution.

Expenses Paid by Dependent

If you claim on your tax return an eligible student who is your dependent, treat any expenses paid (or deemed paid) by your dependent as if you had paid them. Include these expenses when figuring the amount of your lifetime learning credit.

TIP Qualified education expenses paid directly to an eligible educational institution for your dependent under a court-approved divorce decree are treated as paid by your dependent.

Expenses Paid by You

If you claim a dependent who is an eligible student, only you can include any expenses you paid when figuring the amount of the lifetime learning credit. If neither you nor anyone else claims the dependent, only the dependent can include any expenses you paid when figuring the lifetime learning credit.

Related Links

Education Credits and Deductions – Enter, Review, Modify

Lifetime Learning Credit

American Opportunity Credit

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.