Can we claim the American Opportunity Credit and Lifetime Learning Credit?

October 29, 2014 by Dave Du Val, EA
Student desk with books and apple on it

Hey Dave,

I have a daughter, age 20, who is eligible for the American Opportunity Tax Credit of $2,500.00. Can she also use the Lifetime Educational Tax Credit of $4,000.00?

Ralph

 

Ralph,

Sorry to say, but you have your choice between the American Opportunity Credit or the Lifetime Learning Credit, but both credits cannot be claimed on the same student in the same tax year. In addition, there is a misunderstanding in your question, as the Lifetime Learning Credit maximum amount is currently $2,000 per year on any given return. The $4,000 amount is the maximum amount that can be claimed with the Tuition and Fees deduction for taxpayers who qualify for it. But there are two caveats here: first, the Tuition and Fees deduction is currently not available for the 2014 tax year, although many expect it to be extended; and, second, the Tuition and Fees deduction is also coordinated with the American Opportunity Credit and Lifetime Learning Credit. TurboTax® has a maximizer tool to make sure that you receive the credit or deduction that is to your best tax advantage. Usually, this is the American Opportunity Credit, but this is not necessarily so.

More information on the credits is available here.

Deductibly Yours,

Dave

Tags: IRS, tax credit

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David E. Du Val, EA
Chief Compliance Officer for TRI Holdco

 

Dave Du Val, EA, is Chief Compliance Officer for TRI Holdco. Inc., the parent company of TaxAudit, and Centenal Tax Group. A nationally recognized speaker and educator, Dave is well known for his high energy and dynamic presentation style. He is a frequent and popular guest speaker for the California Society of Tax Consultants, the California Society of Enrolled Agents and the National Association of Tax Professionals. Dave frequently contributes tax tips and information to news publications, including US News and World Report, USA Today, and CPA Practice Advisor. Dave is an Enrolled Agent who has prepared thousands of returns during his career and has trained and mentored hundreds of tax professionals. He is a member of the National Association of Tax Professionals, the National Association of Enrolled Agents and the California Society of Enrolled Agents. Dave also holds a Master of Arts in Education and has been educating people since 1972. 


 

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