Some people who lost their jobs due to the coronavirus health crisis decided to go back to school as a way to reinvent themselves and today they spoke with the certified public accountant. Jose Leon to find out what IRS credits are available to students.
According to the expert, there are two credits: the American Opportunity Tax Credit and the Lifetime Learning Credit, both of which can be applied for with the help of a qualified accountant.
“[Para] You have to talk to your accountant for these credits and explain if you have a technical career, a bachelor’s or a master’s degree, “he commented.
According to him official IRS portal, the American Opportunity Tax Credit (AOTC) is a credit for educational expenses paid by an eligible student during the four years of higher education.
Under this premise, you can get a maximum annual credit of $ 2,500 if you are eligible and, if the credit reduces the amount of taxes you owe to zero, you can be refunded 40% of any remaining amount of the credit (up to $ 1,000).
How do you know if you are eligible for AOTC? These are the points that you must fulfill:
- Looking for a degree or other recognized educational credential.
- Be enrolled at least part-time for at least one academic period (semesters, trimesters or any other period of study) beginning in the fiscal year.
- Not have completed the first four years of higher education at the beginning of the fiscal year.
- Not having claimed the AOTC or previous Hope credit for more than four fiscal years.
- Not have a felony drug conviction at the end of the tax year
The portal indicates that in order to claim this credit, the law requires that a taxpayer or an independent has received the Form 1098-T and the Declaration of enrollment from an eligible educational institution, whether national or foreign.
Watch the related video: Tips for Maximizing Your Tax Refund This Tax Season
For its part, the Lifetime Learning Credit (LLC) can help pay for undergraduate, graduate and professional degree courses, including courses to acquire or improve job skills.
The IRS indicates that there is no limit to the number of years you can claim the credit, which is worth up to $ 2,000 per tax return.
How do you know if you are eligible for LLC? These are the points that you must fulfill:
- Be enrolled in or taking courses at an eligible educational institution.
- Taking a higher education course or courses to obtain a degree or other recognized educational credential or to obtain or improve job skills.
- Be enrolled for at least one academic period (semesters, trimesters or any other period of study) starting in the fiscal year.
Who can claim the LLC? These are the points that you must fulfill:
- You, your dependent, or a third party pay qualified education expenses for higher education.
- You, your dependent, or a third party pay the educational expenses of an eligible student enrolled in a eligible educational institution.
- The eligible student is you, your spouse, or a dependent that you listed on their tax return.
For more information visit https://www.irs.gov/
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