Currently, the IRS offers two education credits available, that is, the American opportunity tax credit and the lifetime learning credit.
Both of the Education Tax Credit helps with the cost of higher education by reducing the amount of tax owed on the individual income tax return filed by a taxpayer.
Per the IRS, Taxpayers must meet all three of the following to qualify for the education credit:
- You, your dependent or a third party pays qualified education expenses for higher education.
- An eligible student must be enrolled at an eligible educational institution.
- The eligible student is yourself, your spouse or a dependent you list on your tax return.
If you?re eligible to claim the lifetime learning credit and are also eligible to claim the American opportunity tax credit (AOTC) for the same student in the same year, you can choose to claim either credit, but not both.
You can't claim the AOTC if you were a nonresident alien for any part of the tax year unless you elect to be treated as a resident alien for federal tax purposes.
For more information about AOTC and foreign students, visit American Opportunity Tax Credit - Information for Foreign Students.
The law requires that both you and your qualifying student have a valid Social Security number or Individual Taxpayer Identification Number, issued before the due date for your tax return, in order to claim the AOTC.
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