Have a tax question? Ask a tax Expert

Ask an Expert, Get an Answer ASAP!

Education Credit Questions

The government may have taken the position to help support education by offering tax credits to decrease taxable income. One may be attending college here in the US on a VISA that may be eligible for education tax credits. Questions and concerns pertaining education credit often arise like the ones below that have been asked by many different individuals.

What is an education credit?

Education tax credits were designed to offset the costs of education. The American Opportunity (Hope Credit extended) and the Lifetime Learning Credit are education credits that might save as much as 100% of the deductions on one’s federal income tax. Questions and concerns of who may be eligible for tax credits and what education tax credits are available have been answered below by an Expert.

Can a nonresident alien who qualifies to be treated as a resident alien apply for education credits?

When a person is here on a certain VISA they may have the choice to file as a resident alien or a nonresident alien. If the individual has filed as a resident alien they may then qualify for an education credit. Filing as a nonresident would not allow this individual to claim the credit.

Which parent is allowed to claim the education tax credit, custodial parent or the parent paying for the education?

Guidelines that may determine which parent has the right to claim a child as a dependent and or claim the education credits are as follows:
The child is under age 13
The parent who may have provided over half of the support for the year
The parent who had custody of the child for more than half the year

The parent meeting this criterion may be qualified as the custodial parent; this being the one that usually has the authorization to claim the child as a dependent. Some parents choose to alternate the years. In the event this may not be stipulated in a divorce or custody agreement, it may be best for one to pay the school directly. With receipts showing that the parent paid for the child’s education may allow them to claim the education tax credit for the child.

What is an acceptable source for proof of payment, to support an individual’s claim for education credits to the IRS?

A copy of a receipt for tuition paid would be the best form of proof in supporting the tuition charges an individual may have claimed on an education tax credit. It is the taxpayer’s responsibility to provide proof of payment. Receipts or cancelled checks may also be a viable source for proof of payment.

Is the tax credit different when filing for Hope Education Credit as opposed to Lifetime Education Credit?

The maximum allowance for education credits differ in both, having their own criteria that must be met to qualify. A student may not claim both the Hope credit and Lifetime learning credit for the same tax year. You cannot take both an education credit and a deduction for tuition and fees for the same student in the same year. Tuition expenses that were paid for by non-taxable scholarships, fellowships, employer education assistance, reimbursement, or distributions from qualified savings plans may not qualify toward a credit allowance.

An education tax credit may reduce the amount of income tax you may have to pay. Many of these credits are based not only on one’s income but filing status may also be a determining factor of eligibility. Many students seeking higher education may not be aware of education credits that may be available. Experts are available to provide knowledge to those individuals who are not well aware of education credits that can be used.
Please type your question in the field below

3 verified Tax Professionals are online now

Tax Professionals on JustAnswer are verified through an extensive 8-step process including screening of licenses, certifications, education and/or employment. Learn more

Wallstreet Esq.

Tax Attorney

Doctoral Degree

586 positive reviews
Mark D

Enrolled Agent

Master's Degree

1338 positive reviews

Tax Attorney

Doctoral Degree

6042 positive reviews
See all Tax Professionals