A number of other tax benefits are available
to individuals who are paying higher education costs or repaying student
loans.
Education Credits
You may be able to claim a Hope Credit of
up to $1,500 for qualified tuition and related expenses for each eligible
student during that student’s first two years of post-secondary education.
An eligible student must be taking at least one-half of the normal
full-time workload in order to qualify for the credit. You may be
able to claim a Lifetime Learning Credit of up to $1,000 for the total
qualified tuition and related expenses paid during the tax year for
all students who are enrolled in eligible educational institutions.
The lifetime earning credit is available beyond the second two-years
of post-secondary education and is allowed for students taking one
or more courses. Unlike the deduction for education expenses (discussed
in the preceding section), you can qualify for these credits even
if your employer does not require you to take the course and even
if the course work does not maintain or improve skills required in
your present job. However, you cannot claim more than one type of
tax benefit for the same expenses. For more information, get IRS Publication
970, Tax Benefits for Higher Education.
Student Loans
You may be able to deduct up to $1,500 in
interest payments. This deduction is available only during the first
60 months that interest payments are required. Interest payments are
not considered to be required during any period that payments are
deferred due to your military service. For more information, get IRS
Publication 970, Tax Benefits for Higher Education.
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