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Using a College Tuition Credit Explained – Legal Magazine

One method to obtain tax credits to pay for tuition at college is to take advantage of the Hope credit. The amount you earn in your adjusted gross income will determine the eligibility for the Hope credit. This is a real tax credit, and does not count as a deduction. Tax credit can be claimed dollar-for-dollar amount of the taxes the taxpayer is liable for. Maximum amount for Hope credit that a person can claim is $1,650 for each person who is eligible to be a dependent. There is a two-year limit on your Hope credit. This means that taxpayers can’t benefit from the credit until the first two years of the eligible dependent’s education.

The other type of tax credit on tuition that the taxpayer is called the Lifetime Learning credit. It isn’t subject to a 2-year cap. It’s a little more distinct than it’s Hope credit. Taxpayers can take a 10 percent of the first $10,000 they spend on tuition. Maximum credit of 22,000 dollars is permitted. Credits are not refundable. The credits can reduce the amount of tax the taxpayer needs to pay but won’t give the taxpayer a refund. igvokj5bzx.