OVERVIEW
Note: The income amounts in this video apply only to prior tax years. It is included here for reference only. The Lifetime Learning tax credit is available to anyone who takes at least one class during the year at a post-secondary school, whether it counts toward a degree or not. Obtain the available tax credits for students with information from TurboTax in this video on annual tax filing.
For information on the third coronavirus relief package, please visit our “American Rescue Plan: What Does it Mean for You and a Third Stimulus Check” blog post.
Video transcript:
Hello, I'm Jeremy from TurboTax with some information about the lifetime learning tax credit for students.
It's hard enough trying to make ends meet when you're a student. Luckily, you may qualify to claim a Lifetime Learning Tax Credit to save money on your taxes. The credit gives you a dollar-for-dollar discount on your income taxes up to $2,000 dollars and is equal to 20 percent of the cost you are required to pay directly to the school.
Qualifying for this tax credit is fairly easy. All that is required is that you enroll in at least one course during the year at a post secondary school. You don't even need to be working towards a degree to qualify. It could be a single class you take to enhance job skills.
Before you file your tax return, be on the lookout for your form 1098-T. The school will send you this document to report your eligible cost for the tax credit. Make sure you keep this, since you will need it when filling our form 8863 to claim the credit.
One thing to keep in mind is that the tax credit is only available if your modified adjusted gross income is $60,000 dollars or less ($69,000 for 2020), or $120,000 dollars or less ($138,000 for 2020) if you follow a joint tax return. For most tax payers, modified adjusted gross income is the same as the adjusted gross income you calculate on your income tax return. You cannot claim the credit if you use the married filing separate status.
Remember, with TurboTax, we'll ask you simple questions about your life and help you fill out all the right tax forms. Whether you have a simple or complex tax situation, we've got you covered. Feel confident doing your own taxes.
