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Don’t Forget College Education Credits

Washington, D.C. (February 25, 2013)

By Jeff Stimpson

Parents and students should check if they qualify for either of two college education tax credits or any of several other education-related tax benefits, according to the IRS.

The American Opportunity Tax Credit, the Lifetime Learning Credit, and the tuition and fees deduction are available to taxpayers who pay qualifying expenses for an eligible student. Eligible students include the primary taxpayer, the taxpayer’s spouse or a dependent of the taxpayer. Though a taxpayer often qualifies for more than one of these benefits, they can only claim one of them for a particular student in a particular year.

The benefits are available to both taxpayers who itemize on Schedule A and those who claim a standard deduction. The credits are claimed on Form 8863 and the tuition and fees deduction is claimed on Form 8917.

For those eligible, including most undergraduate students, the American Opportunity Tax Credit will yield the greatest tax savings, the IRS said, while the Lifetime Learning Credit should be considered by part-time students and those attending graduate school, and the tuition and fees deduction might be available for those who don’t qualify for the two credits. All three are available for students enrolled in an eligible college, university or vocational school, including both nonprofit and for-profit institutions.

None of them can be claimed by a non-resident alien or married person filing a separate return. In most cases, dependents cannot claim these education benefits.

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