Q: I have heard some of my college classmates refer to getting “college tax credits”. I am currently in college and wondering, who is eligible to receive these college tax credits? Also, what are some of the most common college tax credits that the average college student might be able to receive and how much money are they worth?
A: What are college tax credits? For qualified United States taxpayers, the IRS offers two federal income college tax credits for higher education expenses. The college tax credits offered by the IRS are reductions you can claim (if you qualify) when filing your federal income taxes.
The Hope Tax Credit (aka: American Opportunity Tax Credit) can be worth up to $2,500 per college student. The Hope Tax Credit is available for only the first four years of postsecondary education.
The Lifetime Learning Tax Credit can be worth up to $2,000. The Lifetime Learning Tax Credit applies to almost any postsecondary education and/or training. Unlike The Hope Tax Credit, The Lifetime Learning Tax Credit applies to undergraduate, graduate and professional degree schools (and even for less than half-time study students).
If you use a tax software such as TurboTax, or have your taxes done by a professional, these college tax credits are fairly easy to identify, and the software or tax professional should be able to determine if you qualify for the college tax credit. If you need more information on tax credits, and other tax benefits for college students, go to www.irs.gov or call 1-800-829-1040.
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