What is Lifetime Learning Tax Credit?

Lifetime Learning Tax Credit 2019Every day we receive many calls regarding the information on Lifetime learning credit (LLC), we have understood the tax payers curiosity in knowing the information for this we have mentioned relevant required information below which will help our clients and taxpayers have clear understanding about the education credit is also called LLC which is to be claimed.

Taxpayers are getting audits/expensive notices from IRS (Internal Revenue Service) and State Income Tax Department for filed incorrect tax returns. The Tax Departments have clearly put conditions on taxpayers, who are on F1 CPT/OPT Visa should file form 1040NR or 1040NR-EZ and they are not eligible to claim American Opportunity Credit (AOTC) or Lifetime Learning Credit unless there is any exclusion.

Taxpayers who are on H1B, L1, GC, GC EAD visas, Citizens and Resident Aliens should file Form 1040 to claim College Tax Credit or Education Credits primarily known as American Opportunity Tax Credit (AOTC) or Lifetime Learning Credit LLC.

What is the Lifetime Learning Tax Credit?

Unlike the tax deduction, Lifetime learning credit is a non-refundable credit which will reduce the amount of income tax to zero but cannot get you refund if there is no tax liability.

A tax payer either claim American Opportunity Credit (AOTC) or Lifetime Learning Tax Credit (LLC), unlike AOTC Lifetime Learning Credit (LLC) is a non-refundable credit, it means if there is no tax left on your tax returns you will not be able to get any refund.

Note: A taxpayer can claim either AOTC or LLC for the same tax year, but not both.

Lifetime Learning Credit for 2019?

For tax year 2019 a student can claim Lifetime learning tax credit  up to $2000 for qualified educational expenses, and it can be claimed any number of years.

Can I claim Lifetime Learning Tax Credit Without 1098T?

Yes, an educational institute is not required to issue form 1098T to a student according to certain rules; it means a student/taxpayer can claim credit (LLC) even if he or she did not receive form 1098T from educational institute can still claim the credit.

Can I claim a Life time Learning Tax Credit?

Yes, if there was any amount spent for qualified education expenses.

A tax payer can claim the Lifetime Learning Credit (LLC) even if there is a delay in getting form 1098T from the institution before the tax filing due date.

  • A taxpayer is eligible even if there is/was few courses
  • A taxpayer/student is eligible though he/she has taken a course to improve skills
  • Can claim LLC even a student is undergraduate, graduate, or professional degree candidate
  • A student can claim LLC unlimited years
  • Even a student you were convicted for felony drug offence can claim LLC

What Expenses Qualify for the Lifetime Learning Credit?

Lifetime Learning Credit (LLC) is 20% of your qualified tuition fees and Expenses on course related books, student activity fees, equipment, supplies and educational expenses, educational expenses can be claimed if the fee is paid to the educational institution for enrolment or attendance.

Do I Qualify for the Lifetime Learning Credit?

LLC is phased out for single filer with maximum adjusted gross income (MAGI) between $56,000 to 66,000. For Married Filing Jointly (MFJ) limit is between $112,000 to 132,000 of MAGI, if the taxpayer MAGI is over the thresholds he/she cannot claim LLC.

If the student is eligible for the LLC according to the threshold, the educational expenses should be qualified expenses.

American Opportunity Credit VS Lifetime Learning Tax Credit

AOTC-American opportunity credit can be claimable for up to four years, but LLC-Lifetime learning credit claimable for unlimited years.

Who is Not Eligible to Claim LLC?

  • If a taxpayers filing status is MFS-Married filing separately
  • A taxpayer is claimed as a dependent on someone’s tax return
  • If MAGI is above $66,000 with single filing status and MAGI is above $132,000 with married filing jointly filing status.
  • Taxpayer is a non-resident according to IRS guidelines.

We do not mean to say that the tax payers have filed incorrect tax returns; we are just trying to explain that by ignorance of tax law or for any reason there might be a mistake on tax returns. IRS routinely checks the tax payers filed tax returns in order to maintain accuracy and correctness for this IRS and state income tax departments are depending on automated software for auditing the tax returns, so before IRS or state income tax department come to you for any clarification it’s better to get every thing clear.

We hope our readers got quite understanding about LLC, so we can even help you in checking your any number of years tax returns without any charges, and our tax experts support will also help you in getting all your tax benefits on your future tax return filing, so please call us today for support, audit, guidance etc.

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