The basic rules for education tax credits

You can claim an education tax credit if you paid tuition and fees for yourself, your spouse, or a dependent in the tax year you're filing. The student must be enrolled at least half-time in a degree or certificate program at an accredited school. The school can be public, private, or for-profit — what matters is that it's accredited by the U.S. Department of Education.

You don't have to be the one attending school. If you paid for your child's tuition, you can claim the credit. If you paid for your spouse's tuition in the year you filed jointly, you can claim it. The person paying and the person in school can be different people.

There are income limits. If your modified adjusted gross income (MAGI) is above a certain threshold, you cannot claim the credit at all. The threshold varies by filing status and changes each year. For 2023, the American Opportunity Tax Credit phases out between $80,000 and $90,000 for single filers, and between $160,000 and $180,000 for married filing jointly. The Lifetime Learning Credit has higher limits: $80,000 to $90,000 for single filers and $160,000 to $180,000 for married filing jointly.

Key Takeaways

  • You must have paid tuition and fees in the tax year you're filing, and the student must be enrolled at least half-time in an accredited degree or certificate program.
  • The student can be yourself, your spouse, or your dependent — you don't have to be the one in school to claim the credit.
  • Your income must fall below the phase-out threshold for your filing status, or you cannot claim the credit at all.
  • You cannot claim a credit for expenses paid with scholarship money, grants, or employer tuition assistance — only out-of-pocket costs count.
  • Some students can claim the credit themselves if they paid their own tuition and meet the income limits, even if their parents claim them as dependents.

What counts as may have access to education expenses

Tuition and fees are the main expenses covered. These are amounts charged by the school for enrollment or attendance. They include mandatory fees like student activity fees, technology fees, and lab fees. They do not include room and board, books, supplies, or transportation — even if the school bills you for them.

Some schools bundle books and supplies into the tuition bill. If they do, only the portion that represents tuition and fees counts. If you buy books separately from the school, they don't count. The same applies to computers and equipment — if you buy them yourself, they're not covered. If the school requires you to buy them as part of enrollment and includes the cost in tuition, that portion may count, but you'll need documentation from the school to prove it.

Expenses paid with scholarship money, grants, or employer tuition assistance do not count. If your child received a $5,000 scholarship and you paid $3,000 out of pocket for a $8,000 tuition bill, you can only claim the credit on the $3,000. If the scholarship or grant money is used for non-tuition expenses like books or room and board, those don't reduce the tuition amount you can claim.

Income limits and phase-out ranges

The income threshold that matters is your modified adjusted gross income (MAGI), not your total income. For most people, MAGI is the same as adjusted gross income (AGI). You can find your AGI on your tax return from the previous year, or calculate it using IRS worksheets.

Once your MAGI exceeds the lower threshold for your filing status, the credit begins to reduce. It phases out completely once you reach the upper threshold. If you're single and your MAGI is $85,000, you're in the phase-out range for the American Opportunity Tax Credit (which runs $80,000 to $90,000 for single filers). You can claim a partial credit. If your MAGI is $91,000, you cannot claim the credit at all.

The thresholds change each year for inflation. The IRS publishes updated amounts in January. If you're close to the limit, check the current year's threshold before filing. Married couples filing separately have much lower thresholds — usually $0 to $10,000 — and most cannot claim the credit at all if filing separately.

Dependent status and who can claim the credit

If your parents claim you as a dependent, you generally cannot also claim an education tax credit for yourself. Your parents claim it instead. However, there's an exception: if your parents don't claim the credit, you can claim it for yourself if you meet the income limits and paid the tuition.

This matters when a student pays their own tuition but their parents claim them as a dependent anyway. The student should ask their parents whether they plan to claim the education credit. If they don't, the student can claim it. If they do, the student cannot. Only one person can claim the credit for the same student in the same year.

If you're married filing jointly, both spouses' income counts toward the limit. If one spouse attended school and the other didn't, you still use the combined MAGI to determine whether you're over the threshold. You can claim the credit for either or both spouses' education in the same year, as long as you're under the income limit.

Students who are not dependents

If you're an adult student and nobody claims you as a dependent, you can claim the education credit yourself if you paid the tuition and meet the income limits. Your filing status and income determine whether you're may be able to access. If you're single with a MAGI under $90,000 (for 2023), you can claim the American Opportunity Tax Credit. If you're over that but under $130,000, you may be able to claim the Lifetime Learning Credit instead.

Some adult students have parents who could claim them as dependents but don't. In that case, the student can claim the credit. The key is whether someone actually claims the student as a dependent on their tax return, not whether they could.

Part-time students and enrollment requirements

The student must be enrolled at least half-time for at least one academic period during the tax year. Half-time is defined by the school, not by you. You need to check with the school's financial aid office to confirm what counts as half-time enrollment for that institution.

If a student was enrolled half-time in the fall semester but dropped out in January, they still count as having been enrolled during the tax year. If they were enrolled part-time (less than half-time), they don't count. The enrollment must be in a degree or certificate program — not in individual courses taken for personal enrichment.

Some schools offer accelerated or non-traditional programs. As long as the program leads to a degree or recognized certificate and the school is accredited, the student counts. Online students are treated the same as in-person students.

Accreditation and school may be able to access

The school must be accredited by an agency recognized by the U.S. Department of Education. Most colleges, universities, and trade schools meet this requirement. You can check whether a school is accredited by searching the Department of Education's database of accredited institutions on their website.

Some schools claim to be accredited but aren't recognized by the federal government. If you claim a credit for a student at an unaccredited school, the IRS will disallow it. Before paying tuition, confirm the school's accreditation status. If you're unsure, contact the school's registrar or financial aid office and ask for their accreditation agency.

Schools that are accredited but have lost accreditation during the year still count for the portion of the year they were accredited. If a school lost accreditation in March, tuition paid in January and February counts, but tuition paid in April and later does not.

Frequently Asked Questions

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

Yes. The credit is based on tuition you paid, not on how you paid for it. If you borrowed money to pay tuition, you still count as having paid it. You can claim the credit and also deduct student loan interest on a separate line of your tax return.

What if the student attended school for only part of the year?

The student must be enrolled at least half-time for at least one academic period during the tax year. If they were enrolled in the fall semester but not the spring, they still count. If they were enrolled for only three weeks before dropping out, they still count as long as that counts as one academic period at their school.

Can I claim the credit for my adult child if they don't live with me?

Yes, if you claim them as a dependent on your tax return and meet the income limits. The student doesn't have to live with you to be your dependent — they must meet the IRS definition of dependent, which includes a relationship test, a citizenship test, and an income test. Check IRS Publication 17 for the full rules.

What happens if my income is right at the phase-out threshold?

If your MAGI is exactly at the lower threshold, you can claim the full credit. The credit only begins to reduce once you go above the lower threshold. If you're at the upper threshold, you cannot claim any credit. The IRS rounds to the nearest $1,000, so check the exact threshold for your filing status and year.

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

No. You can claim one or the other for each student, but not both in the same tax year. If you have multiple students, you can claim the American Opportunity Credit for one and the Lifetime Learning Credit for another. You choose which credit gives you the larger benefit for each student.