How is the Lifetime Learning Credit calculated for part-time students?
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The Lifetime Learning Credit (LLC) is available to taxpayers who pay qualified tuition and related expenses for themselves, their spouse, or their dependents to attend eligible educational institutions. The calculation and eligibility for part-time students are as follows:
1. Eligibility for Part-Time Students
- The LLC is available for any student enrolled in one or more courses at an eligible educational institution. There is no requirement that the student be enrolled at least half-time or be pursuing a degree program. This means part-time students, as well as those taking a single course to acquire or improve job skills, are eligible.
2. Calculation of the Credit
- The LLC is calculated as 20% of the first $10,000 of qualified tuition and related expenses paid per tax return, not per student, per year.
- The maximum credit per return is $2,000 (20% × $10,000).
Example Calculation:
If a part-time student pays $4,000 in qualified tuition and related expenses in a year:- LLC = 20% × $4,000 = $800
If multiple eligible students’ expenses are claimed on the same return, add their qualified expenses together, but only the first $10,000 in total expenses is eligible for the credit.
3. Qualified Expenses
- For the LLC, qualified expenses include tuition and fees required for enrollment or attendance, and course-related books, supplies, and equipment only if required to be paid to the institution as a condition of enrollment or attendance.
4. Income Phaseout
- The credit is phased out for taxpayers with modified adjusted gross income (MAGI) between $80,000 and $90,000 ($160,000 and $180,000 for joint filers). No credit is allowed if MAGI is at or above the upper limit.
5. Other Key Points
- The LLC is nonrefundable; it can reduce your tax to zero but will not result in a refund if the credit exceeds your tax liability.
- The credit can be claimed for an unlimited number of years for any student.
- You cannot claim the LLC for a student for whom you are also claiming the American Opportunity Credit in the same year.
6. Summary for Part-Time Students
- Part-time students are fully eligible for the LLC.
- The credit is 20% of up to $10,000 in qualified expenses per return.
- No degree or half-time enrollment is required.
- The credit is subject to income phaseouts and is nonrefundable.
In summary: The Lifetime Learning Credit for part-time students is calculated as 20% of up to $10,000 in qualified tuition and related expenses paid per return, with a maximum credit of $2,000, subject to income phaseouts. Part-time enrollment is sufficient; there is no requirement for half-time or degree-seeking status.
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