Lifetime Learning Credit (LLC)

Lifetime Learning Credit (LLC) is a non-refundable federal tax credit. The maximum LLC allowed per taxpayer return is $2,000 per year and the credit can be claimed for multiple students on the same tax return. The LLC is for qualified tuition and related expenses paid for eligible students enrolled in an eligible college. This credit can help pay for undergraduate, graduate and professional degree courses — including courses to acquire or improve job skills. There is no limit on the number of years you can claim the credit, that is why it’s called “Lifetime Learning”. It is worth up to $2,000 per tax return.

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Calculation of Credit

The Lifetime Learning Credit is calculated by taking 20% of up to a maximum of $10,000 in “qualified tuition and related expenses”.

EXAMPLE: If a family has a combined total of $15,000 in qualified expenses for all the exemptions claimed on the tax return, the Lifetime Learning Credit for the tax return would be $2,000 (20% x $10,000) maximum qualified expenses. If the same family only had combined expenses of $6,000, the Lifetime Learning Credit would be $1,200, (20% x $6,000).

Maximum Credit Allowed

If there are 4 eligible students that each has qualified expenses of $15,000, the maximum LLC (10k per student) that could be claimed is $2,000 (20% of 10K) per that taxpayer return.

What are the income limits for LLC?

• For TY2022, the amount of your LLC is gradually reduced (phased out) if your MAGI is between $80,000 and $90,000 ($160,000 and $180,000 if you file a joint return).
• You can’t claim the credit if your MAGI is $90,000 or more ($180,000 or more if you file a joint return).

No LLC is allowed for married individuals filing separate returns.

Many adults use the LLC to offset expenses in their adult education courses that are used towards obtaining a degree.

The LLC cannot be claimed for the same qualified expenses for which the American Opportunity Tax Credit (AOTC) is claimed.

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The Lifetime Learning Credit cannot be claimed in the same year that a tax-free distribution from a Coverdell Education Savings Account (CESA) or Qualified Tuition (529) Plan is received. However, if the CESA or 529 distributions is elected to be taxable, the Lifetime Learning Credit can be claimed.

For high-income families, the parent(s) can give up the Lifetime Learning Credit, which allows the student to claim the credit if the student has an income tax liability.