How to Apply for the U.S. Education Tax Credit?
If you and your spouse or dependents attend in a college, university, or other educational institutions, you can apply for the following two major education tax credits to reduce your tax burden in the United States.
1. American Opportunity Credit (AOTC)
The maximum amount that every student can claim under American Opportunity Tax Credit (AOTC) is $2,500. If your tax amount is 0, you can claim maximum refund for $1,000, or 40% tax refund after using the tax credit. You only can claim the American Opportunity Tax Credit (AOTC) for 4 years.
To qualify for the American Opportunity Credit, you must meet all the following conditions:
- The student has not completed four years of college education.
- The student enrolls in courses leading to degrees, certificates, or learning credentials.
- The student enrolls for at least half time in one academic period during the tax year.
- The student has never been convicted of a felony or drug crime.
2. Lifetime Learning Credit (LLC)
You only can claim the Lifetime Learning Tax Credit once for each tax return per year. If you have multiple family members who are eligible for the credit in a tax year, you only can claim a total $2,000 for all of them. If your tax amount is 0, you will not receive tax refund.
To claim for the Lifetime Learning Credit, you must meet all the following conditions:
- You and your spouse or dependents pays qualified education expenses for an eligible educational institution.
- You and your spouse or dependents enroll in a qualified educational institution for at least one academic year
(Academic year can be a semester, trimester, quarter, summer school, etc.)
USCPA Sophie Luo (羅霞) reminds you that if you want to claim the education tax credit, you need to provide a Form 1098-T issued from the relevant educational institutions, which reports all expenses that qualify for the tax credit.
If you have any questions or need further help,
please contact us at the USCPA Sophie Luo (羅霞) +886 980919600
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