You must owe taxes for the year. The educational credit is deducted from taxes owed. The amount is not subtracted from taxable income.
Use the Lifetime Learning Credit for all courses taken in a post-secondary educational environment. The courses can include college courses, as well as courses required to enhance job skills. Remember that the Hope education credit covers the first two years of post-secondary educational courses. Lifetime Learning is generally not used until the third year of college.
Consider finances when applying. Single taxpayers cannot make more than $55,000 per year. A married couple cannot claim more than $110,000. The figures are based on modified adjusted gross income, or MAGI. The Hope tax credit and the Lifetime Learning credit cannot be claimed together.
Several categories exist for taxpayers to claim the credit. A taxpayer who is single can claim the Lifetime learning credit, claiming themselves as the recipient. Parents with dependent children can file for the credit. A taxpayer can claim a spouse as a dependent---and can file for the claim on the joint tax return. One cannot claim the Lifetime Learning Credit if married but filing separately.
Apply as soon as a decision to enroll in classes is made, in order to receive proper credit on tax returns filed. The Lifetime Learning Credit can be claimed throughout a person's lifetime education process. Graduate and job-related courses are eligible.