In: Accounting
Please explain the difference between the types of education
covered by the American Opportunity tax credit and the lifetime
learning credit.
.
There are two tax credits available to persons who pay expenses for higher (postsecondary) education.
* The American Opportunity Credit, and
* The Lifetime Learning Credit
For each student we can choose only one of the credits for any one year. For example, if we choose to take the American Opportunity Credit for a child on our 2017 tax return then we cannot also claim the Lifetime Learning Credit for that same child for 2017.
If we pay qualified education expenses for more than one student in the same year, we can choose to take the American Opportunity and the Lifetime Learning Credits on a per-student, per-year basis. This means that, for example, we can claim the American Opportunity Credit for one student and the Lifetime Learning Credit for another student in the same year.