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

Important Changes This Year

Taxes and Credits

Education Benefits

American opportunity credit for 2018 is gradually reduced (phased out) if taxpayers' MAGI is between $80,000 and $90,000 ($160,000 and $180,000 if Married Filing Jointly). Taxpayers cannot claim a credit if their MAGI is $90,000 or more ($180,000 or more if Married Filing Jointly).

To claim the American opportunity credit, taxpayers must provide the educational institution's employer identification number (EIN) on Form 8863. Taxpayers should be able to obtain this information from Form 1098-T or the educational institution.

Lifetime learning credit for 2018 is gradually reduced (phased out) if taxpayers' MAGI is between $57,000 and $67,000 ($114,000 and $134,000 if Married Filing Jointly). Taxpayers cannot claim a credit if their MAGI is $67,000 or more ($134,000 or more if Married Filing Jointly).

Student loan interest deduction begins to phase out for taxpayers with MAGI in excess of $65,000 ($135,000 for joint returns) and is completely phased out for taxpayers with MAGI of $80,000 or more ($165,000 or more for joint returns). There is no change.

Code section 529 plans now allow such plans to distribute not more than $10,000 in expenses for tuition incurred during the taxable year in connection with the enrollment or attendance of the designated beneficiary at a public, private, or religious elementary or secondary school. This limitation applies on a per-student basis, rather than a per-account basis. This applies to distributions made after December 31, 2017.