A college education is crucial for intellectual development.
However, Higher Education is expensive in United States.
According to IRSthere is two college education tax credits designed to mitigate high costs.
Taxpayers who paid for college in 2021 saved money with both programs on their tax returns.
The IRS says that ee american opportunity tax credit and lifetime learning credit reduce the amount of tax someone owes.
What are the two tax credits to help college students?
The IRS has two programs to help cover higher education.
The US Opportunity Tax Credit
-Worth a maximum benefit of $2,500 per qualifying student.
-Available only the first four years at an eligible college or vocational school.
-For students pursuing a degree or other recognized educational credential.
-Partially refundable. People could recover up to $1,000.
Lifetime Learning Credit
-Worth a maximum benefit of $2,000 per tax return, per year, regardless of the number of eligible students.
-Available for all years of post-secondary studies and for courses to acquire or improve professional skills.
-Available for an unlimited number of tax years.
Who is eligible for both credits?
According to thand IRS, to claim any of the credits, taxpayers must complete Form 8863, Education Creditsand attach it to their tax return.
Eligible taxpayers must receive -or a addicted must receive- Form 1098-T from a qualifying educational institution.
If taxpayers, their spouses or dependents are taking post-secondary education, they may be eligible for a tax benefit.
If the credit reduces the tax to less than zero, the taxpayer could even receive a refund.