Education Credits

Can I claim an Education Credit?

If you, your spouse, or dependent was enrolled at or attending an eligible educational institution, you may claim an education credit.  For dependents, only the person who claims the student as a dependent can claim a credit for the student’s qualified education expenses. (If a student is not claimed as a dependent, only the student can claim a credit.)

How is the credit calculated?

The credits are based on the amount of qualified education expenses paid for the student in 2010 for academic periods beginning in 2010 and in the first three months of 2011.  Expenses must be reduced by any expenses paid directly or indirectly using tax-free educational assistance.

Do the expenses have to be paid by the student or the person claiming the dependent?

Qualified education expenses paid on behalf the student by someone other than the student (such as relative) are treated as paid by the student.  However, qualified education expenses paid (or treated as paid) by a student, who is claimed as a dependent on your tax return, are treated as paid by you.

What types of Education Credits are available?

At the moment, there are two types of education credits:  1) American Opportunity Credit (Hope Credit extended) and 2) Lifetime Learning Credit.  The American Opportunity Credit is for amounts paid in 2009 & 2010. (You can claim the credit for only 4 years and if you received the Hope Credit, that credit counts towards the number of years for the American Opportunity Credit.)   There is no limit on the number of years for the Lifetime Learning Credit, so you can use this credit for amounts paid in tuition and fees exceeding the four years if applicable.