How College Students Can Take Advantage of Tax Credits
Hollis Freshman Seeks Advice
Full-time college students may be eligible for several tax credits that can offset the burden of paying for their education. One of the largest is the American Opportunity Tax Credit (AOTC). This credit is available for the first four years of post-graduate school and allows up to $2,500 per eligible student.
A Hollis, NH graduate was heading to college in the fall was looking for opportunities to cut expenses. He inquired with Merrimack Tax Associates about tax credits available for college students.
American Opportunity Tax Credit
Students can get a tax credit of $2,500. To qualify for this, students must be within the first four years of their post-graduate work and pursing a degree or certificate. Classes must be taken at least half of the tax year and the student must have no felony drug convictions.
To receive the full tax credit, the student’s gross income must be $80,000 or less for single filers, or $160,000 or less for married couples that are filing jointly.
Lifelong Learning Credit
Another opportunity for college students to save is the Lifelong Learning Credit. This tax credit is for students who have already completed four years of secondary education and are looking to pursue a higher degree or improve their job skills. In this scenario, an eligible student can claim 20% of up to $10,000 in qualified education expenses. The credit can only be applied once per tax year, with a maximum of $2,000.
To be eligible for the Lifelong Learning Credit, students must be enrolled in the educational institution for at least one semester and be taking courses towards a degree or vocational improvement. An eligible student’s income cannot exceed $66,000 for single filers or $132,000 for those couples filing together.
The Hollis student was pleased to learn about these opportunities to offset his taxes and plans to take advantage of them as he pursues his degree.