Do you have a student going to college for the first time or are you
returning to college? You might qualify for education credits!
*The American Opportunity Credit, *originally created under the American
Recovery and Reinvestment Act, is still available for 2012. The credit
can be up to $2,500 per eligible student and is available for the first
four years of post secondary education at an eligible institution. Forty
percent of this credit is refundable, which means that you may be able
to receive up to $1,000, even if you don’t owe any taxes. Qualified
expenses include tuition and fees, course related books, supplies and
equipment.
If you do not qualify for the American Opportunity Credit, you may be
able to claim a Lifetime Learning Credit of up to $2,000 for qualified
education expenses paid for a student enrolled in eligible educational
institutions. There is no limit on the number of years you can claim the
Lifetime Learning Credit.
You can claim only one type of education credit per student in the same
tax year, however, if you pay college expenses for more than one student
in the same year, you can choose to take credits on a per-student,
per-year basis.
*Student loan interest deduction *may be deductible interest paid on a
qualified student loan during the year. It can reduce the amount of your
income subject to tax by up to $2,500, even if you don’t itemize
deductions.
As with all things associated with the IRS and tax, these education
benefits are subject to certain rules and income limitations which may
reduce or even eliminate your tax benefit.
