Tax Tip 2025-23: Review the education credits before filing a federal tax return

IRS Tax Tips

April 3, 2025

Issue Number: Tax Tip 2025-23

Review the education credits before filing a federal tax return

There are two tax credits designed to help taxpayers reduce education costs: the American Opportunity Tax Credit and the Lifetime Learning Credit.

Eligibility requirements

For both tax credits, to be eligible:

The taxpayer, their spouse or their dependents must have taken post-high school coursework in tax year 2024.
The student must have a Form 1098-T, Tuition Statement, from an eligible educational institution. There are exceptions for some students.

Things taxpayers should know about the education tax credits

The American Opportunity Tax Credit is:

Worth a maximum benefit of up to $2,500 per eligible student.
Available only for the first four years at an eligible college or vocational school.
For students pursuing a degree or other recognized education credential.
Partially refundable. People could get up to $1,000 back.

The Lifetime Learning Credit is:

Worth a maximum benefit of up to $2,000 per tax return, per year.
Available for all years of postsecondary education and for courses to acquire or improve job skills.
Available for an unlimited number of tax years.

Claiming the credits

To claim either credit, taxpayers must complete Form 8863, Education Credits, and file it with their federal tax return.

More information

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Issue Number: Tax Tip 2025-23