What is lifetime learning tax credit?

The Lifetime Learning Credit (LLC) is a tax credit for qualified education expenses paid for undergraduate, graduate, or professional degree courses. Unlike the American Opportunity Tax Credit (AOTC), which is limited to the first four years of college, the LLC can be claimed for an unlimited number of years. However, the maximum credit amount is lower than the AOTC.

Here's a breakdown of key features:

* Nonrefundable: This means the credit can reduce your tax liability to $0, but you won't receive any of the credit back as a refund.

* Maximum Credit: The maximum LLC is $2,000 per tax return. This is a 20% credit up to $10,000 in educational expenses.

* Eligible Expenses: Tuition and fees are eligible. Books, supplies, and room and board are *not* included.

* Who Can Claim: The student (or their spouse, if filing jointly) must be taking courses toward a degree or for job skills improvement. The student doesn't need to be enrolled at least half-time.

* Modified Adjusted Gross Income (MAGI) Limits: There are no income limitations for claiming the LLC.

Key Differences from the American Opportunity Tax Credit (AOTC):

| Feature | Lifetime Learning Credit (LLC) | American Opportunity Tax Credit (AOTC) |

|-----------------|---------------------------------|---------------------------------------|

| Maximum Credit | $2,000 | $2,500 |

| Years Claimable | Unlimited | First four years of higher education |

| Enrollment | No minimum enrollment required | Must be enrolled at least half-time |

| Refundable | No | Yes |

In short, the LLC is a valuable option for students pursuing higher education beyond the first four years or those taking courses for professional development. However, it's important to understand its limitations compared to the AOTC to determine which credit is more beneficial in a given situation. Taxpayers should consult a tax professional to determine which credit, if any, they qualify for.