Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Education Credits

Choosing Between the Credits

How do the Credits Differ?

There are several differences between the two credits.

The American opportunity credit:

  • Can be claimed based on the same student’s expenses for no more than four tax years, including any years the Hope credit was claimed
  • Qualified tuition and related expenses include expenses for course materials—books, supplies, and equipment needed for a course of study, whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance
  • Generally, 40% of the credit is a refundable credit, which means taxpayers can receive up to $1,000 even if they owe no taxes

Lifetime learning credit:

  • There is no limit on the number of years the lifetime learning credit can be claimed for each student
  • Course-related books, supplies, fees, and equipment are included in qualified education expenses only if they must be paid to the institution as a condition of enrollment or attendance
  • No portion of the credit is refundable

For more complete information, review the Comparison of Education Credits in the Volunteer Resource Guide.

Example

Bob was a full-time student and a fifth-year senior. He has only claimed the American opportunity and Hope credit in three earlier years. Does he qualify for the American opportunity credit? Yes. Bob qualifies for the American opportunity credit because he only claimed the credit in three previous tax years.

Education Credits

Education Credits