Lifetime Learning Credit & The American Opportunity Tax Credit

Understand the differences

Two of the most popular tax breaks to help pay for college and other post-secondary education programs are the Lifetime Learning Credit (LLC) and the American Opportunity Tax Credit (AOTC). Here’s what you need to know about each tax credit:

Both of these credits are available to you, your spouse, and a student you claim as a dependent on your tax return. Here are a couple of other tips to consider:

You may only cover a qualified expense in one program. So if you have a scholarship, you must apply this first and may not use the same expenses to qualify for either an LLC or AOTC.

So which is best for you?

• Per family vs per student. If you have multiple uses for the credit each year pay attention to the per family (LLC) versus the AOTC. Then maximize each's value for you.

• One burns out. Note the AOTC is available for a limited time while use of the LLC is unlimited.

• There are other options. If you have scholarships, 529 plans or grants, you will want to coordinate all of these options along with the LLC and AOTC.

• Coordinate. You can use both programs for different students, but not for the same student in a single year.

Please call if you’d like assistance in determining which educational tax benefits make the most sense for your situation as it can change from year to year.