Monday, August 17, 2020

Tax Tip 2020-103: Tax credits can help offset the cost of higher education

Bookmark and Share

IRS.gov Banner
IRS Tax Tips August 17, 2020

Useful Links:

IRS.gov

Help For Hurricane Victims


News Essentials

What's Hot

News Releases

IRS - The Basics

IRS Guidance

Media Contacts

Facts & Figures

Around The Nation

e-News Subscriptions


The Newsroom Topics

Multimedia Center

Noticias en Español

Radio PSAs

Tax Scams/Consumer Alerts

The Tax Gap

Fact Sheets

IRS Tax Tips

Armed Forces

Latest News


IRS Resources

Compliance & Enforcement News

Contact Your Local IRS Office

Filing Your Taxes

Forms & Instructions

Frequently Asked Questions

Taxpayer Advocate Service

Where to File

IRS Social Media

 


Issue Number: Tax Tip 2020-103


Tax credits can help offset the cost of higher education

Whether it's online, in-person, part-time or full-time, higher education can be expensive. The good news is there are tax credits that can help offset these costs. These credits reduce the amount of tax someone owes. If the credit reduces tax to less than zero, the taxpayer could even receive a refund.

Taxpayers who pay for higher education in 2020 can see these tax savings when they file their tax return next year. If taxpayers, their spouses or their dependents take post-high school coursework, they may be eligible for a tax benefit.

There are two credits available to help taxpayers save money on schooling, the American opportunity tax credit and the lifetime learning credit. Taxpayers use Form 8863, Education Credits, to claim the credits.

To be eligible to claim either of these credits, a taxpayer or a dependent must have received a Form 1098-T from an eligible educational institution. There are exceptions for some students.

Here are some key things taxpayers should know about each of these credits.

The American opportunity tax credit is:

  • Worth a maximum benefit of up to $2,500 per eligible student.
  • Only for the first four years at an eligible college or vocational school.
  • For students pursuing a degree or other recognized education credential.
  • Partially refundable. People could get up to $1,000 back.

The lifetime learning credit is:

  • Worth a maximum benefit of up to $2,000 per tax return, per year, no matter how many students qualify.
  • Available for all years of postsecondary education and for courses to acquire or improve job skills.
  • Available for an unlimited number of tax years.

Taxpayers can use the Interactive Tax Assistant tool on IRS.gov to figure out if they're eligible for these credits.


More information:
Compare Education Credits
Publication 970, Tax Benefits for Education

Share this tip on social media -- #IRSTaxTip: Tax credits can help offset the cost of higher education. https://go.usa.gov/xfH7j

Back to Top

FaceBook Logo  YouTube Logo  Instagram Logo  Twitter Logo  LinkedIn Logo


Thank you for subscribing to IRS Tax Tips, an IRS e-mail service. For more information on federal taxes please visit IRS.gov.

This message was distributed automatically from the IRS Tax Tips mailing list. Please Do Not Reply To This Message.

 


This email was sent to business.solutions.ve@gmail.com by: Internal Revenue Service (IRS) · Internal Revenue Service · 1111 Constitution Ave. N.W. · Washington DC 20535 GovDelivery logo

No comments:

Post a Comment