What is the maximum Lifetime Learning Credit for 2018?

Lifetime Learning Credit (LLC) for 2018

Purpose of the Lifetime Learning Credit

The Lifetime Learning Credit (LLC) is a tax credit created to alleviate the costs of tuition and related expenses for eligible students pursuing higher education (https://www.irs.gov/credits-deductions/individuals/llc).

Eligibility Criteria

To qualify for the LLC, the following criteria must be met (https://www.irs.gov/credits-deductions/individuals/llc):

Key Facts

  1. Purpose of the Lifetime Learning Credit (LLC): The LLC is a tax credit designed to offset the cost of tuition and related expenses for eligible students.
  2. Eligibility: To claim the LLC, you must meet the following criteria:
    • You, your dependent, or a third party must have paid qualified education expenses for higher education.
    • The education expenses must be paid for an eligible student enrolled at an eligible educational institution.
    • The eligible student can be yourself, your spouse, or a dependent listed on your tax return.
  3. Qualified Expenses: The LLC can be used to pay for undergraduate, graduate, and professional degree courses, as well as courses taken to acquire or improve job skills.
  4. Number of Years: There is no limit on the number of years you can claim the LLC. You can claim it for multiple tax years if you meet the eligibility requirements.
  5. Income Limits: For tax year 2018, there were income limits for claiming the LLC. The credit was gradually reduced (phased out) if your Modified Adjusted Gross Income (MAGI) was between $56,000 and $66,000 ($112,000 and $132,000 if filing jointly).
  6. Nonrefundable Credit: The LLC is a nonrefundable credit, which means it can only reduce your tax liability to zero. Any excess credit cannot be issued as a refund.
  • Qualified education expenses for higher education must be paid by the taxpayer, their dependent, or a third party.
  • The education expenses must be incurred for an eligible student enrolled at an eligible educational institution.
  • The eligible student can be the taxpayer, their spouse, or a dependent claimed on their tax return.

Qualified Expenses

The LLC can be applied to expenses associated with undergraduate, graduate, and professional degree programs, as well as courses taken to enhance job skills (https://www.irs.gov/credits-deductions/individuals/llc).

Number of Years

There is no restriction on the number of years the LLC can be claimed. Eligible taxpayers can claim the credit for multiple tax years (https://www.irs.gov/credits-deductions/individuals/llc).

Income Limits

In 2018, income limits were in place for claiming the LLC. The credit was phased out for taxpayers with a Modified Adjusted Gross Income (MAGI) between $56,000 and $66,000, and between $112,000 and $132,000 for joint filers (https://www.irs.gov/pub/irs-prior/i8863–2018.pdf).

Nonrefundable Credit

The LLC is a nonrefundable credit, meaning it can only reduce the taxpayer’s tax liability to zero. Any excess credit cannot be refunded (https://www.irs.gov/credits-deductions/individuals/llc).

Sources

FAQs

What is the maximum amount of the Lifetime Learning Credit for 2018?

The maximum amount of the LLC for 2018 is $2,000 per tax return.

What is the income limit for claiming the LLC in 2018?

For 2018, the income limit for claiming the LLC was $56,000 to $66,000 for single filers and $112,000 to $132,000 for joint filers.

Is the LLC refundable?

No, the LLC is a nonrefundable credit. This means that it can only reduce your tax liability to zero. Any excess credit cannot be issued as a refund.

How many years can I claim the LLC?

There is no limit on the number of years you can claim the LLC. You can claim it for multiple tax years if you meet the eligibility requirements.

What expenses qualify for the LLC?

The LLC can be used to pay for qualified tuition and related expenses, including undergraduate, graduate, and professional degree courses, as well as courses taken to acquire or improve job skills.

Who is eligible to claim the LLC?

To claim the LLC, you must meet the following criteria:

    • You, your dependent, or a third party must have paid qualified education expenses for higher education.
    • The education expenses must be paid for an eligible student enrolled at an eligible educational institution.
    • The eligible student can be yourself, your spouse, or a dependent listed on your tax return.

What is the difference between the LLC and the American Opportunity Tax Credit (AOTC)?

The LLC and the AOTC are both tax credits for education expenses. However, there are some key differences between the two credits. The LLC is not refundable, while the AOTC is partially refundable. Additionally, the LLC has no income limit, while the AOTC has income limits. Finally, the LLC can be claimed for an unlimited number of years, while the AOTC can only be claimed for four years per eligible student.

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