Education Tax Credits Calculator

Compare the American Opportunity Tax Credit (up to $2,500 per student, partially refundable) and the Lifetime Learning Credit (up to $2,000 per return, non-refundable). Includes MAGI phase-out and the rules for switching between credits.

Inputs

Student & tax details

Filing status

Modified AGI (MAGI)AGI + foreign earned income exclusion + similar add-backs

Qualified education expenses paidTuition, required fees, course materials (for AOTC). Books/supplies for AOTC even if not paid to institution.

Number of eligible studentsAOTC is per-student; LLC is per-return regardless of count

AOTC eligibility per studentMust be in first 4 years of post-secondary, half-time minimum, no felony drug conviction, hasn't claimed AOTC for 4+ years prior

Estimated tax liability before creditsLimits non-refundable portion of either credit

Can't double-dip: the same qualified education expenses for the same student in the same year can be used for either AOTC or LLC — but not both. Different students on the same return can mix credits (one on AOTC, another on LLC).

Comparison

Which credit wins?

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📊 2025 Parameters

AOTC max per student$2,500

AOTC refundable max$1,000

LLC max per return$2,000

Phase-out (Single)$80K–$90K

Phase-out (MFJ)$160K–$180K

💡 Quick Rules

AOTC formula: 100% of first $2,000 + 25% of next $2,000 = up to $2,500/student. 40% refundable up to $1,000.

LLC formula: 20% × qualified expenses up to $10K = max $2,000 per return.

Form 8863 claims both credits; Form 1098-T from the school is the documentation source.

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How the education credits are calculated

Two credits offset the cost of higher education, both claimed on Form 8863. The American Opportunity Tax Credit (AOTC) is worth up to $2,500 per eligible student — 100% of the first $2,000 of qualified expenses plus 25% of the next $2,000 — and 40% of it (up to $1,000) is refundable. The Lifetime Learning Credit (LLC) is worth up to $2,000 per return — 20% of up to $10,000 of qualified expenses — and is nonrefundable.

Both phase out over the same modified-AGI ranges: $80,000 to $90,000 for single and head-of-household filers and $160,000 to $180,000 for married filing jointly (the credit is fully eliminated above the top of each range, and married-filing-separately taxpayers cannot claim either credit). You cannot claim both credits for the same student in the same year, though you can claim the AOTC for one student and the LLC for another.

Worked example

A single parent (MAGI $70,000) pays $4,000 of tuition and required fees for a first-year, half-time college student. The AOTC is 100% × $2,000 + 25% × $2,000 = $2,500, of which up to $1,000 is refundable. For a part-time graduate student with $6,000 of tuition who has already used four years of AOTC, the Lifetime Learning Credit applies instead: 20% × $6,000 = $1,200, nonrefundable.

Common mistakes & edge cases

The AOTC is limited to the first four years of postsecondary education and requires at least half-time enrollment in a degree program; the student must also not have a felony drug conviction. The LLC has no year limit and no enrollment-level requirement — even a single course to improve job skills qualifies. You cannot use the same dollars of expense for both a credit and a tax-free distribution (such as a 529 plan withdrawal or a scholarship); doing so is double-dipping. If a student is claimed as a dependent, only the taxpayer claiming the dependent may take the credit.

Frequently asked questions

What is the difference between the AOTC and the Lifetime Learning Credit?

The AOTC (up to $2,500, 40% refundable) is for the first four years of an undergraduate degree with at least half-time enrollment. The LLC (up to $2,000, nonrefundable) has no year or enrollment-level limit and covers graduate study and single courses. You cannot claim both for the same student in the same year.

What are the income limits for education credits?

Both credits phase out between $80,000 and $90,000 of MAGI for single and head-of-household filers, and between $160,000 and $180,000 for married filing jointly. Above the top of each range no credit is allowed, and married filing separately cannot claim either.

Can I claim an education credit and use a 529 plan?

Yes, but not for the same expenses. You must reduce the qualified expenses used for the credit by any amounts paid with tax-free 529 distributions or tax-free scholarships, so the same dollars are not counted twice.