For expenses paid after June 30, 1998, for academic periods beginning after that date,
you may be able to claim a lifetime learning credit of up to $1,000 for the total
qualified tuition and related expenses paid during the tax year for all students who
are enrolled in eligible educational institutions. Unlike the Hope credit:
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The lifetime learning credit is not based on the student's work load.
It is allowed for one or more courses.
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The lifetime learning credit is not limited to students in the first two
years of post-secondary education.
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Expenses for graduate-level degree work are eligible.
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There is no limit on the number of years for which the lifetime learning
credit can be claimed for each student.
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The amount you can claim as a lifetime learning credit does not vary (increase)
based on the number of students for whom you pay qualified expenses.
Amount of Credit: The amount of the lifetime learning credit
is 20% of the first $5,000 you pay for qualified tuition and related expenses
for all students in the family.
The maximum amount of lifetime learning credit you can claim for 1998 is $1,000
(20% times $5,000). However, that amount may be reduced based on your modified
adjusted gross income.
Example: Bruce and Toni are married and file a joint tax
return. For 1998, their modified adjusted gross income is $40,000. Toni already
has a bachelor's degree in history
and wants to receive hands-on science experience through Junior Engineering's
graduate level course at Utah State University (an eligible educational institution).
In August 1998,
Toni paid $50 for her fall 1998 course. Bruce and Toni can claim a $10 (20%
* $50) lifetime learning credit on their 1998 joint tax return. This makes
a net cost of $40 for
one semester graduate credit at Utah State University.
Caution: You cannot claim any higher education credits if your modified adjusted gross income is
over $50,000 ($100,000 in the case of a joint return).
For more information on the Lifetime Learning Tax Credit:
http://www.irs.ustreas.gov/prod/forms_pubs/pubs/p173601.htm
