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A free scan shows the junk files, broken settings and background clutter dragging Windows down - then fixes them in one click.Free scan · Windows 10 & 11For a 2025 U.S. federal tax return filed in 2026, calculate the American Opportunity Tax Credit (AOTC) or Lifetime Learning Credit (LLC) on IRS Form 8863 and attach it to Form 1040 or 1040-SR. Who claims the student, which credit fits, and how much you may claim depend on dependency status, eligible expenses, income, and each credit’s rules.
Who claims the student’s education credit?
If someone claims the student as a dependent on their tax return, that person generally claims the education credit for the student. The student generally claims their own credit only when no one else claims them as a dependent. For credit purposes, expenses paid by a third party may be treated as paid by the student—and, if the student is a dependent, by the person claiming them.
Check eligibility for the taxpayer and student before calculating anything. Married taxpayers filing separately generally cannot claim either credit. Specified nonresident alien circumstances and being claimed as another taxpayer’s dependent can also affect eligibility. AOTC has additional student requirements, including limits on prior AOTC claims, pursuit of a credential, at least half-time enrollment for an eligible period, and a felony drug conviction rule. Review the applicable 2025 Form 8863 instructions for the full rules and identification-number requirements.
Choose between the AOTC and LLC
Only one of these credits may be claimed for a particular student in the same year. A return may claim both credits for different students if each student and set of expenses qualifies. The IRS describes the restriction this way: “You can claim both the AOTC and LLC on the same return only if they are not for the same student and the same expenses.”
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| Feature | American Opportunity Tax Credit (AOTC) | Lifetime Learning Credit (LLC) |
|---|---|---|
| Maximum | Up to $2,500 per eligible student | Up to $2,000 per tax return |
| Expense calculation | Based on up to $4,000 of adjusted qualified expenses per student | 20% of up to $10,000 of adjusted qualified expenses per return |
| Refundability | Generally, 40% of the allowable credit may be refundable, up to $1,000 under the general calculation; special rules can prevent the refundable portion for certain younger taxpayers | Nonrefundable: it can reduce tax owed, but cannot create a refund beyond tax liability |
| Student and study rules | Generally limited to the first four years of postsecondary education. The student must pursue a credential and be enrolled at least half-time for an eligible period. Limited to four tax years per student. | May cover one or more courses, including study to acquire or improve job skills. No equivalent four-tax-year student limit. |
| School EIN on Form 8863 | Required | Not required under the 2025 instructions |
For 2025, the credits phase out as modified adjusted gross income (MAGI) rises from $80,000 to $90,000 for most taxpayers who are not filing jointly, and from $160,000 to $180,000 for joint filers. Neither credit is available at or above the top of the applicable range. The rules include MAGI adjustments and other details, so check the instructions rather than relying on a headline income figure.
Gather and verify education expense records
Use Form 1098-T as a starting point, not as a complete ledger of what you paid. Its reported amounts may not match all qualified tuition and related expenses paid during the year. Reconcile it with the school account statement, receipts, proof of payment, scholarship and grant information, and records of other education assistance. The IRS’s Publication 970 explains qualified education expenses and education benefits.
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- Do not count expenses paid with tax-free scholarships toward a credit.
- Do not use the same expense for more than one education tax benefit.
- Some course-related books, supplies, and equipment needed for attendance may qualify for the AOTC even when purchased outside the school. Whether an item qualifies depends on the applicable rules and documentation; do not assume every school-related purchase qualifies or that the same treatment applies to the LLC.
A Form 1098-T is generally required, but IRS instructions provide exceptions, including certain nonresident alien students, some situations in which scholarships cover all expenses, and certain formal employer or government billing arrangements. There is also a process for some eligible students who do not receive a form before filing. Follow the specific exception and steps that apply; simply not having the form does not by itself establish eligibility to claim a credit. For AOTC, enter the school’s employer identification number (EIN) on Form 8863; it may appear on Form 1098-T or be obtained from the school.
How to claim the credit on your return
- Identify the tax year and claimant. This guidance is for a 2025 federal return. Determine whether the student is claimed as a dependent and, if so, who claims them.
- Collect the records. Gather Form 1098-T, school account statements, receipts, proof of payment, and scholarship, grant, and other education-assistance records.
- Check each student’s eligibility. For AOTC, verify prior years claimed, credential and enrollment requirements, and other student rules. Check whether the student’s courses and expenses qualify for LLC if considering that credit.
- Calculate adjusted qualified expenses. Remove amounts covered by tax-free scholarships or other benefits and avoid using any expense for another tax benefit.
- Select the credit for each student. Compare the credits available, but do not claim AOTC and LLC for the same student in the same tax year.
- Complete Form 8863. Fill out a separate student section for each student, then complete the credit calculation. Attach the form to Form 1040 or 1040-SR.
- Carry the credit to the return. Under the 2025 form instructions, report the AOTC nonrefundable portion on Schedule 3, line 3, and its refundable portion on Form 1040 or 1040-SR, line 29. Report LLC on Schedule 3, line 3. Confirm the line placements on the applicable tax-year forms before filing.
If the IRS denied or reduced an AOTC claim in a prior year for a reason other than a math or clerical error, Form 8862 may be required when claiming AOTC again. Check the current instructions and the prior IRS determination.
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1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errorsCheck the right tax year and scope
This article covers U.S. federal credits for the 2025 tax year, based on IRS materials available for the 2026 filing season; it does not determine an individual’s eligibility or cover state education credits. State rules vary. Because income thresholds, form lines, and eligibility rules can change, use the instructions for the tax year on the return you are filing. For an IRS overview, see Education Credits: AOTC and LLC.
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