Education Tax Credit Calculator (AOTC/LLC)

The American Opportunity Tax Credit (AOTC) is worth up to $2,500 per student and is partially refundable (up to $1,000 back even with no tax owed). It applies only to the first 4 years of post-secondary education. The Lifetime Learning Credit (LLC) is worth up to $2,000 per tax return, is non-refundable, and has no limit on the number of years you can claim it — making it better for graduate students or part-time learners.

You can claim an education credit if you, your spouse, or a dependent you claim on your return paid qualified education expenses at an eligible institution. You must file a tax return and cannot be claimed as a dependent on someone else's return. Your Modified Adjusted Gross Income (MAGI) must also fall within the phase-out limits.

You cannot claim an education credit if you are claimed as a dependent on another person's tax return, if you file as Married Filing Separately, or if your MAGI exceeds the phase-out ceiling ($90,000 single / $180,000 joint). For AOTC specifically, students with a felony drug conviction or who have already claimed the credit for 4 prior years are also ineligible.

Both credits cover tuition and required enrollment fees paid to an eligible educational institution. AOTC additionally covers books, supplies, and equipment required for coursework, even if purchased outside the school. Neither credit covers room and board, transportation, health insurance, or personal living expenses.

For tax year 2024, the AOTC begins to phase out when your MAGI exceeds $80,000 (single filers) or $160,000 (joint filers) and completely phases out at $90,000 and $180,000, respectively. The LLC has the same phase-out range. Married filing separately filers cannot claim either credit.

You can claim both credits on the same tax return, but not for the same student. For example, if you have two qualifying students — one undergraduate and one graduate — you could claim AOTC for one and LLC for the other. No double benefit is allowed for the same student's expenses.

Yes, the AOTC is partially refundable. If the credit reduces your tax liability to zero, you can receive up to 40% of the remaining credit (maximum $1,000) as a refund. The Lifetime Learning Credit, by contrast, is entirely non-refundable — it can only reduce your tax bill to zero, but you won't receive any excess as a refund.

Tax-free scholarships and grants reduce your qualified education expenses for credit purposes. You can only claim a credit on expenses you actually paid out-of-pocket after subtracting any tax-free financial aid. However, scholarships that are taxable (included in your income) do not reduce your qualifying expenses.