- This tax credit is applicable to those enrolled as undergraduate,
graduate education, or education geared to improve or acquire job skills.
- An eligible student must have a high school diploma or its equivalent.
- The Lifetime Learning Tax Credit may be claimed for an unlimited number
of years as long as the individual meets the income limits and takes classes
at an eligible institution.
- The Lifetime Learning Tax Credit may be claimed for the taxpayer, the
taxpayer's spouse, or an eligible dependent. This credit does not vary
according to the number of students in a household.
- The tax credit may be used for part-time study, unlike the Hope Tax
Credit requirements, which stipulate a half-time enrollment status.
- The Lifetime Learning Tax Credit covers qualified costs, which includes
tuition and fees, but specifically excludes books, room and board, nonacademic
fees (i.e. student activity fee, athletic fees, insurance expenses, etc.),
and expenses involving sports, games, or hobbies unless they are part of
the student's degree program.
- Scholarships and grant aid do not count as qualified tuition and related
expenses paid by the taxpayer. Only out-of-pocket expenses count, however, this includes gifts, bequests, and inheritances as qualified tuition
and expenses paid by the taxpayer.
- The credit gradually phased out for taxpayers who have a modified
adjusted gross income between $40,000 and $50,000 ($80,000 to $100,
000 for married taxpayers filing jointly).