College Tax Benefits
Several education-related tax deductions and credits are available that can reduce your education costs. These benefits are available to part-time students, full-time students, and parents of dependent students.
- Lifetime Learning Tax Credits offers a federal tax credit of up to $2,000 for each year you pay for college. Independent students, families claiming dependent students, and married students are eligible during any year in which the student attended college, even if it was just one or two classes.
- American Opportunity Tax Credit offers a federal tax credit up to $2,500. Independent students, families claiming dependent students, and married students are eligible. The credit allows you to claim up to four years of postsecondary education. Qualifying education expenses include tuition and fees and the cost of required course materials, such as books and supplies.
- The Tuition and Fees Deduction can reduce your income by up to $4,000. The taxpayer must claim an eligible student (an individual enrolled in one or more courses at an eligible educational institution) as a dependent on the tax return—or the deduction may be for the taxpayer or the taxpayer's spouse. Qualified education expenses include tuition and fees required for enrollment or attendance at an eligible postsecondary institution.
- The Student Loan Interest Deduction offers up to a $2,500 deduction of interest from federal taxable income. Independent students, families with one or more dependent students, and married students may be eligible for this deduction during any year in which they paid interest on a student loan.
- For more information on these programs, students and their families should contact their tax advisors or visit www.irs.gov/publications/p970/index.html.