There are two types of education credits:
The American Opportunity Tax Credit allows you to lower your income tax bill up to $2,500 per student, per year on undergraduate tuition, fees and books. This credit is only for the first four years of college. This credit is to be filed by undergraduate students who file their own returns, or parents who pay for tuition for children that are claimed as dependents.
The Lifetime Learning Credit allows you to deduct 20% of the first $10,000 paid in tuition. Room and board is not included in either of the credits. This credit is for graduate students and vocational students. There is no limit to the number of years that this credit can be claimed.
The information will be sent to taxpayers on a Form 1098-T.
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