The Lifetime Learning Credit (LLC) is an educational tax credit claimed by U.S. taxpayers on Form 8863 (Education Credits). The lifetime learning credit is a federal tax credit for qualified tuition and related expenses paid to an eligible educational institution.

For U.S. tax purposes, there are two tax credits available:

  • American Opportunity Tax Credit (AOTC)
  • Lifetime Learning Tax Credit (LLC)

In general, the LLC is available to more taxpayers because it has fewer restrictions from the AOTC. The lifetime learning credit has the following attributes:

  • The credit is available for an unlimited number of years and can be claimed even if the student isn’t pursuing a degree.
  • The credit is nonrefundable, meaning it can only offset taxes owed. If the taxpayer’s tax bill is reduced to zero, there is no refund for the LLC.
  • The maximum amount of credit is $2,000 per tax return (i.e., 20% of all eligible tuition costs).
Who Qualifies for the LLC?
  • The student must be taking courses at an eligible educational institution.
  • The student must be taking higher education courses.
  • The student must be enrolled for at least one academic period beginning in the current tax year.
Example Lifetime Learning Credit for a Taxpayer

Jane Doe is a single-filing taxpayer and full-time marketing consultant earning $85,000 in wages for 2023. She completed her four-year bachelor’s degree in 2019 and claimed the AOTC for all four years. Jane is now taking two classes in computer science as part of a non-degree-seeking program. Her total tuition for the two classes was $2,050 for the 2023 tax year.

Jane completed Form 8863 Parts II and III for the nonrefundable LLC. The amount of Jane’s nonrefundable LLC is initially $410 ($2,050 times 20%). However, the credit must be limited because Jane’s adjusted gross income (AGI) exceeds $80,000. Jane must reduce her credit to $205.

Please view our video tutorial here on how to complete Form 8863 with the taxpayer’s Form 1040 (US Individual Income Tax Return).

Additional Information

Taxpayer’s looking for more information on the LLC and AOTC can visit the IRS website and review the Form 8863 instructions.