College classes may increase your federal refund

  • Published
  • By Catherine Harrington
  • 36th Wing Tax Center
If you've taken post secondary courses and paid out of pocket expenses, keep your receipts! You may be eligible for one of the following two education credits that IRS offers.

The first credit is the American Opportunity Credit, or Hope Credit Expanded. Due to the amount of the refundable credit, this is the more difficult credit to obtain. To qualify for this credit, you must be enrolled at least half time and pursing an undergraduate degree or other recognized education credentialed program. The American Opportunity Credit is available for the first four years of post secondary education and if you do not have a felony drug conviction. This credit is up to $2,500, or up to $3,600 if you were a student in a Midwestern Disaster Area, per eligible student. Forty percent of the American Opportunity Credit is refundable - up to $1,000 even if no taxes are owed.

Most students will qualify for the second credit--the Lifetime Learning Credit. This is a non-refundable credit up to $2,000, or up to $4,000 if a student in a Midwestern Disaster Area, credit per tax return. The Lifetime Learning Credit is available for all years of post secondary education and for courses to acquire or improve job skills. To qualify, the student needs to be taking at least one course, and the felony drug conviction rule does not apply for eligibility.

Both credits are reduced with modified adjusted gross income amounts. For more information, please contact the Andersen Tax Center @ 366-4TAX or visit the IRS website