Tax incentives

Get federal income tax relief and take advantage of education-related tax credits and deductions. These benefits can significantly reduce your tax liabilities, by thousands of dollars in some cases.

American Opportunity Tax Credit

The American Opportunity Credit could provide you with a partially-refundable income tax credit of up to $2,500 per eligible student.

Lifetime Learning Credit

You may be able to claim a non-refundable Lifetime Learning Credit of up to $2,000 for qualified education expenses paid for all eligible students. There is no limit on the number of years the Lifetime Learning Credit can be claimed with respect to any student.

Tuition and fees deduction

You can reduce income subject to tax by up to $4,000 for tuition and related expenses. Qualifying expenses are the tuition and fees required for enrollment or attendance at an eligible college, university, or vocational school. You, your spouse, or your dependent must have incurred these expenses.

You do not need to itemize deductions in order to be eligible for this deduction.

Student loan interest deduction

If you took out student loans, you may be able to deduct up to $2,500 in interest paid yearly. To qualify, you should have used proceeds from the loan toward qualified higher education expenses, including tuition, fees, room, board, supplies, and other related expenses by you, your spouse, or dependent.

To claim this deduction, taxpayers must file federal tax Form 1040 or 1040A; you do not need to itemize deductions.

For more information on the tax credits and deductions available for education-related expenses, see IRS Publication 970, Tax Benefits for Education, at