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

October 29, 2014 by Dave Du Val, EA

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