Education credits - AOTC and LLC

An education credit helps with the cost of higher education by reducing the amount of tax owed on your tax return. If the credit reduces your tax to less than zero, you may get a refund. There are two education credits available: the American opportunity tax credit (AOTC) and the lifetime learning credit (LLC).

Don’t overlook these important credits.

Who can claim an education credit?

There are additional rules for each credit, but you must meet all three of the following for both:

1. You, your dependent or a third party pays qualified education expenses for higher education.
2. An eligible student must be enrolled at an eligible educational institution.
3. The eligible student is yourself, your spouse or a dependent you list on your tax return.

Who cannot claim an education credit?

You cannot claim an education credit when:

• Someone else, such as your parents, list you as a dependent on their tax return
• Your filing status is married filing separately
• You already claimed or deducted another higher education benefit using the same student or same expenses (see Education Benefits: No Double Benefits Allowed for more information)
• You (or your spouse) were a non-resident alien for any part of the year and did not choose to be treated as a resident alien for tax purposes (find more information in Publication 519, U.S. Tax Guide for Aliens)

Compare the education credits

The education credits have some similarities but some very important differences. Find out which credit you qualify for, see our handy chart to compare education credits.

Use our interactive app

Our interactive app, "Am I Eligible to Claim an Education Credit?" helps you determine if you are eligible for education credits and deductions.

What should I do if I receive a letter from the IRS or I’m audited?

Taxpayer rights

You will benefit from knowing your rights as a taxpayer and being familiar with the IRS's obligations to protect them. The goal of the Taxpayer Bill of Rights is to inform you of your rights during every step of your interaction with the IRS.

Did you receive a letter?

If you receive a letter or are audited by the IRS, it may be because the IRS did not receive a Form 1098-T, Tuition Statement, verifying the student’s enrollment or we need additional information to support the amounts of qualified expenses you reported on Form 8863. Review your Form 1098-T to make sure the student’s name and social security number are correct. If they do not match, contact the school to correct the information for future 1098-T reporting. If the student should have and did not receive the Form 1098-T, contact the school for a copy. Note: There are a few exceptions in which educational institutions are not required to furnish Form 1098-Ts, for example if the student:

• is a qualified nonresident alien,
• has qualified education expenses paid entirely with scholarships,
• has qualified education expenses paid under a formal billing arrangement, or
• is enrolled in courses for which no academic credit is awarded.

Audit and examination process

IRS selects income tax returns for examination identified by computer programs showing a return has incorrect amounts. The examination may or may not result in a change to your tax or credits.

Use the following links for additional information:

• Publication 3498-A, The Examination Process (Examinations by Mail) PDF
• Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund

Resources