Tax Credits for Working College Students
Working college students who are not claimed as a dependent on another tax return may be eligible to receive tax credits from the Internal Revenue Service. The availability and amount of individual credits depend on filing status, income levels and type of higher education expenses. Some common examples of education tax breaks for students are the American Opportunity Credit, the Lifetime Learning Credit and the tuition and fees tax deduction. If a student is age 25 or over with income lower than announced IRS thresholds, there is also an earned income tax credit for which a student may apply.
Other People Are Reading
-
American Opportunity Credit
-
Students attending college for the first time may be eligible for the American Opportunity Credit. The American Opportunity Credit is designed for students in the first four years of postsecondary education. Students filing as single must make less than $90,000 during the tax year to qualify. The IRS states a maximum credit of $2,500 per student for the American Opportunity Credit.
Lifetime Learning Credit
-
The Lifetime Learning Credit is for students enrolled in undergraduate, graduate or professional courses. The Lifetime Learning Credit is not restricted to those in the first four years of college. Eligible students taking the credit receive 20 percent of the first $10,000 in eligible expenses up to a total of $2,000.The Lifetime Learning Credit is reduced for those making over $50,000, and is phased out at incomes of $60,000 or more.
-
Tuition and Fees Deduction
-
Students may elect to utilize the IRS tuition and fees deduction, which can reduce the amount of taxable income by up to $4,000. The tuition and fees deduction is still available to students not itemizing deductions on a tax return. As of publication, the deduction is available to single students with a modified adjusted gross income of less than $80,000. Students cannot be nonresident aliens, or be claimed as a dependent on another taxpayer return.
Earned Income Tax Credit
-
As of publication, single students having earned an adjusted gross income of less than $13,460 during the tax year may be eligible to receive an Earned Income Tax Credit of up to a maximum of $457. The IRS has a number of requirements to receive the credit, including the taxpayer must have a valid Social Security number, be a United States citizen, cannot be considered a qualifying child of another taxpayer or have foreign earned income. There are separate adjusted gross income limits based on filing status. Check with your tax adviser regarding your eligibility for the Earned Income Tax Credit.
-
References
Resources
- Photo Credit Goodshoot/Goodshoot/Getty Images
