College Education Credits
There are two different college education credits available to individuals taking college courses. You can choose which credit to take each year. Parents claim their dependent's tax credits on their own tax return. Don't overlook these credits to help offset the high cost of college tuition.
American Opportunity Tax Credit
The maximum annual credit is $2,500 per eligible student. Qualified education expenses of $4,000 will maximize the credit for the year. You must be pursuing a degree and be attending school at least half time to qualify. Also, this credit can only be claimed for four (4) tax years. Tuition, fees & books qualify for this credit.
Lifetime Learning Credit
The maximum annual credit is $2,000 per eligible student. The credit is equal to 20% of qualified education expenses up to $10,000. Only tuition and fees qualify for this credit.