Question

If attending grad school, are there any education credits available to the taxpayer?

Answer 1

Yes, a taxpayer can avail lifetime learning tax credit if he/she is attending a graduate school. This credit can be availed if the taxpayer has made payment towards tuition, fees and books required as a part of enrolling in the relevant course with the eligible institution. The maximum amount of lifetime learning tax credit that can be claimed is limited to 20% of a maximum of $10,000 paid (by the taxpayer) towards eligible costs or $2,000 (10,000*20%). For Instance, if the taxpayer has made a total payment of $5,000 towards tuition, fees and books during the year, he/she will be entitled to receive a lifetime learning tax credit of $1,000 only (20%*5,000). However, if the payment towards eligible costs is $12,000, the taxpayer will receive a tax credit of $2,000 only (which is the maximum limit).

Lifetime learning tax credit is subject to income limits which may be specified by the tax authorities from time to time or for each year. For Instance, the lifetime earning tax credit may not be available if the modified adjusted gross income of an individual (single taxpayer) exceeds $68,000 and $136,000 for joint filers for the year 2019.