Keyword: Lifetime Learning Credit

This is archived information that pertains only to the 2005 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

How is the amount of the Hope or Lifetime Learning Credit determined?

The amount of the credit is determined by the amount you pay for qualified tuition and related expenses paid for each eligible student and the amount of your modified adjusted gross income (AGI).

If tuition was paid by a government subsidized loan, can I still take the Hope or Lifetime Learning Credit?

If you take out a loan to pay higher education expenses, those expenses may qualify for the credit if you will be required to pay back the loan. The credit is claimed in the year in which the expenses are paid, not in the year in which the loan is repaid.

What is a Lifetime Learning Credit?

A nonrefundable tax credit up to a certain dollar amount per family for all undergraduate and graduate level education. The Lifetime Learning Credit is calculated by talking a percentage of the qualified educational expenses paid. This information is found in Publication 970, Chapter 3.

Who is eligible for the Lifetime Learning Credit?

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

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

The Lifetime Learning Credit is based on qualified tuition and related expenses you pay for yourself, your spouse, or a dependent for who you can claim an exemption on your tax return. Generally, the credit is allowed for qualified tuition and related expenses paid in the tax year for an academic period beginning in that year or in the first 3 months of the following year.

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.

An eligible educational institution is an college, university, vocational school, or other post-secondary educational institution eligible to participate in a student aid program administered by the Department of Education. It includes virtually all accredited, public, nonprofit, and proprietary (privately owned profit-making) post-secondary institutions. The educational institution should be able to tell you if it is an eligible educational institution.

You cannot claim the Lifetime Learning Credit if any of the following apply.

Your filing status is married filing separately.
You are listed as a dependent in the Exemptions section on another person's tax return (such as your parent's). See Who Can Claim a Dependent's Expenses, later.
Your modified adjusted gross income is above a specified amount. Modified adjusted gross income is explained later under Does the Amount of Your Income Affect the Amount of Your Credit.
You (or your spouse) were a nonresident alien for any part of the tax year and the nonresident alien did not elect to be treated as a resident for tax purposes. More information on resident aliens can be found in Publication 519, U.S. Tax Guide for Aliens.
You claim the Hope credit for the same student in same year.

Can the Lifetime Learning Credit be used for a high school student taking classes at an approved college prior to graduation from high school?

College courses taken while attending high school may qualify for the Hope Scholarship Credit or for the Lifetime Learning Credit if the student meets the qualifications for claiming either of the credits.

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