You may get money back through education tax credits, but only if you paid tuition and meet income limits

The federal government offers two main tax credits for tuition: the American Opportunity Tax Credit and the Lifetime Learning Credit. A tax credit is different from a deduction — it reduces the actual tax you owe, dollar for dollar. If you paid tuition in the tax year you're filing for, you may be able to claim one of these credits when you file your return. Whether you get a refund depends on how much tax you already paid through withholding or estimated payments, and whether the credit is larger than what you owe.

The catch is that both credits have income limits. If your income is above a certain threshold, you cannot claim either one. The limits change each year and depend on your filing status. You also cannot claim a credit for tuition that was paid with money from a scholarship, grant, or student loan — only for tuition you paid out of pocket.

Key Takeaways

  • The American Opportunity Tax Credit covers up to $2,500 per student per year for the first four years of college, and up to $1,000 of it can be refunded to you even if you owe no tax.
  • The Lifetime Learning Credit covers up to $2,000 per return (not per student) for any year of college or graduate school, but it is not refundable — you only benefit if you owe tax.
  • You cannot claim a credit for tuition paid with scholarship money, grant money, or student loan funds, only for tuition you paid yourself.
  • Both credits have income limits that phase out at higher incomes, and you must choose one or the other for each student — you cannot claim both in the same year.
  • You report education credits on Form 8863 and attach it to your tax return, or claim them through tax software if you file electronically.

The American Opportunity Tax Credit: up to $2,500 per student

The American Opportunity Tax Credit is the larger of the two credits and the one most people should look at first. It covers up to $2,500 per student per year, but only for the first four years of a degree program. The student must be enrolled at least half-time in a program leading to a degree or certificate.

What makes this credit valuable is that up to $1,000 of the $2,500 is refundable. That means if you owe less than $1,000 in tax, you can still get the difference back as a refund. For example, if you owe $300 in tax and claim a $2,500 American Opportunity credit, you would owe $0 and receive a $700 refund (the refundable portion). The remaining $1,500 of the credit would reduce any tax you owed beyond that.

To claim this credit, the student must have a valid Social Security number, be a U.S. citizen or resident alien, and cannot have been convicted of a felony drug offense. The income limit for 2024 is $80,000 to $90,000 for single filers and $160,000 to $180,000 for married filing jointly, though these amounts change yearly.

The Lifetime Learning Credit: up to $2,000 per return

The Lifetime Learning Credit is smaller and less flexible, but it covers more situations. You can claim it for any year of undergraduate, graduate, or professional school, and there is no limit to how many years you can claim it. You can also claim it for courses that do not lead to a degree, such as professional development or certification programs.

The maximum credit is $2,000 per tax return, not per student. If you have two children in college in the same year, you can only claim $2,000 total, not $2,000 each. Unlike the American Opportunity credit, this credit is not refundable — you only benefit from it if you owe tax. If you owe $500 and claim a $2,000 Lifetime Learning credit, you would owe $0 but would not receive a $1,500 refund.

The income limits are the same as the American Opportunity credit: $80,000 to $90,000 for single filers and $160,000 to $180,000 for married filing jointly in 2024. You cannot claim both credits for the same student in the same year, but you can claim the American Opportunity credit for one child and the Lifetime Learning credit for another.

What tuition counts and what does not

You can only claim a credit for tuition and fees you paid yourself. This includes tuition, required course fees, and required books and supplies if they were purchased through the school. It does not include room and board, transportation, or optional fees.

If you paid tuition with money from a scholarship, grant, or student loan, that portion does not count toward the credit. For example, if tuition was $10,000 and a scholarship covered $6,000, you can only claim a credit based on the $4,000 you paid out of pocket. If a student loan covered the full amount, you cannot claim any credit, even though you will eventually repay the loan.

The tuition must have been paid in the tax year you are filing for. If you paid tuition in December 2024 for spring 2025 classes, you claim it on your 2024 return, not your 2025 return.

How to claim the credit on your tax return

If you file on paper, you report education credits on Form 8863, which you attach to your Form 1040. The form asks for the student's name, Social Security number, the school's name and identification number, and the amount of may have access to tuition you paid. You then calculate which credit you are may have access to to and transfer the amount to your Form 1040.

If you file electronically through tax software, the software will walk you through questions about education expenses and calculate the credit for you. You will need the school's employer identification number (EIN), which you can find on the school's website or by calling their financial aid office.

You must choose one credit or the other for each student. You cannot claim both the American Opportunity and Lifetime Learning credits for the same person in the same year. If you have multiple students, you can split the credits — for example, American Opportunity for one child and Lifetime Learning for another — but each student can only have one credit claimed.

Income limits and how they affect your refund

Both credits begin to phase out at specific income levels. For 2024, the American Opportunity credit starts to reduce at $80,000 for single filers and $160,000 for married filing jointly. The Lifetime Learning credit has the same thresholds. If your income is above the upper limit of the phase-out range, you cannot claim either credit.

The phase-out is gradual. If your income is $85,000 as a single filer, you do not lose the entire credit — it reduces by a percentage based on how far into the phase-out range you are. The IRS instructions on Form 8863 include a worksheet to calculate the reduced amount.

If your income is too high to claim either credit, you have no other education-related tax benefit available through the federal income tax system. Some states offer their own education credits, so check your state tax form to see if you are may be able to access for anything there.

When you might not get a refund even with a credit

Remember that the Lifetime Learning Credit is not refundable. If you claim it and it is larger than the tax you owe, you straightforward owe $0 — you do not get the excess back. The American Opportunity credit is partially refundable (up to $1,000), so you have a better chance of getting money back, but only if you claim it.

You also will not get a refund if you have no tax liability to begin with. If you earned very little income and owe no federal tax, the Lifetime Learning credit does nothing for you. The American Opportunity credit can still help because of the refundable portion, but only up to $1,000.

If you are a dependent on someone else's return, you cannot claim an education credit yourself. Your parent or guardian claims it based on tuition they paid for you. If they do not claim it, you cannot claim it on your own return.

Frequently Asked Questions

Can I claim a tuition credit if I paid with a student loan?

No. Student loan funds are not considered money you paid out of pocket. Only tuition you paid with your own money, money from family, or money from a scholarship or grant that you chose to use for tuition counts. If a loan covered the cost, you cannot claim a credit for it, even though you will repay the loan later.

What if I paid tuition in December for classes that start in January?

You claim the credit in the year you paid it. If you paid in December 2024 for spring 2025 classes, you claim it on your 2024 tax return. The year of payment matters, not the year the classes occur.

Can I claim both the American Opportunity and Lifetime Learning credits in the same year?

Not for the same student. You must choose one or the other for each person. If you have two children in school, you can claim American Opportunity for one and Lifetime Learning for the other, but you cannot claim both credits for the same child in the same tax year.

Do I have to be the one who paid the tuition to claim the credit?

No. If someone else paid your tuition — a parent, grandparent, or other family member — they can claim the credit if you are their dependent. If you are not a dependent, the person who paid the tuition claims it. You cannot claim a credit for tuition someone else paid if you are not their dependent.

What if my income is too high to claim the credit?

If your income exceeds the phase-out range, you cannot claim either education credit. There is no other federal income tax credit for tuition at that income level. Some states offer their own education credits with different income limits, so check your state's tax forms to see if you may have access to there.