The Tax Code includes two credits that can help taxpayers reduce higher education costs: the American opportunity tax credit (AOTC) and the lifetime learning credit (LLC). You can claim both credits on the same return, but not for the same student or the same qualified expenses.

The two credits have numerous characteristics in common, but there are some key differences. The following chart provides a comparison of the two credits.

Comparison of Education Credits for 2019 

American Opportunity Tax CreditLifetime Learning Credit
Maximum amount$2,500 per eligible student per year

(100% of the first $2,000, 25% of the next $2,000)

$2,000 per tax return
Refundable?Yes, up to 40% of the creditNo
Filing statusAll except Married Filing SeparatelyAll except Married Filing Separately
2019 modified adjusted gross income limitMarried Filing Jointly: $180,000

All others: $90,000

Married Filing Jointly: $136,000

All others: $68,000

Available if taxpayer is a dependent on someone else’s return?NoNo
Citizenship requirementTaxpayer or spouse must be a U.S. citizen or resident alienTaxpayer or spouse must be a U.S. citizen or resident alien
Program requirement
  • Student is pursuing a degree or other recognized education credential
  • Student has not yet completed first four years of postsecondary education at start of tax year
Pursuit of degree or credential not required

Available for courses to acquire or improve job skills

Enrollment requirementStudent must be enrolled at least half-time for at least one academic period during the tax yearCredit available for one or more courses
Number of years the credit can be claimed per studentNo more than four tax yearsUnlimited
What expenses qualify for the credit?
  • Tuition
  • Required enrollment fees
  • Course-related books, supplies, and equipment (whether or not purchased from the educational institution being attended)
  • Tuition
  • Enrollment fees
  • Course-related books, supplies, and equipment (only if purchased from the institution as condition of enrollment or attendance)
For whom can a taxpayer claim the credit?
  • Self
  • Spouse
  • A student the taxpayer claims as a dependent for tax purposes
  • Self
  • Spouse
  • A student the taxpayer claims as a dependent for tax purposes
Taxpayer can claim the credit for qualified expenses paid by:
  • Self
  • Spouse
  • Student
  • A third party
  • Self
  • Spouse
  • Student
  • A third party

As noted above, it is possible to file a return that claims both the AOTC and the LLC, but they must be for different students and different expenses. If you have expenses that qualify for both credits, the American opportunity credit is generally more valuable. Similarly, you cannot claim either credit for expenses that were paid using a tax-free distribution from a 529 plan. Carefully document your payments to show that different expenses are being used to justify an education tax credit and a 529 tax-free distribution.

To learn more about how tax credits can help you afford education costs, and how to weigh the benefits of different credits and education savings plans, please contact your CRI tax advisor.