The Lifetime Learning Credit is a tax credit offered by the IRS that allows eligible taxpayers to receive up to $2,000 in credits per year for qualified education expenses paid for themselves or their spouse. Some key things to know about the Lifetime Learning Credit:
It can be claimed for an unlimited number of years.
- The maximum credit is $2,000 per tax return.
- The credit rate is 20% of the first $10,000 of qualified education expenses.
- There is no limit to the number of students or courses that qualify.
Do Online Courses Qualify?
Yes, online courses and programs can qualify for the Lifetime Learning Credit. As long as the course materials are part of an education program provided by an eligible educational institution, the expenses are considered qualified.
Some key points about online course eligibility:
- Courses must be part of a degree or certificate program. Individual courses not part of a program do not qualify.
- The institution must be accredited. It needs to be an eligible post-secondary educational institution accredited by an accrediting body recognized by the Department of Education.
- Expenses include course materials. This includes access to online platforms, software, textbooks and supplies required for the course.
As long as the online program meets the eligibility requirements, taxpayers can claim qualified tuition and related expenses such as course materials, software access fees and more. This makes the Lifetime Learning Credit a valuable tax benefit for those pursuing online education.
FAQs
Q: Can I claim the credit for MOOCs from places like Coursera, edX or Udacity?
A: It depends. MOOCs (Massive Open Online Courses) are generally not eligible unless they are part of a formal degree or certificate program from an accredited institution. Standalone MOOCs are considered informal courses.
Q: What if I take some courses for career advancement rather than a degree?
A: As long as the courses are part of a formal education program, even if it’s not leading to a degree, they can qualify. The program does not need to be degree-oriented.
Q: How do I claim the credit when filing taxes?
A: You file Form 8863 with your tax return to claim the Lifetime Learning Credit. Be sure to attach documentation of qualified tuition expenses such as Form 1098-T from your school.
Q: Is there an income limit for the credit?
A: Yes, the Lifetime Learning Credit is a non-refundable credit, which means you must have a tax liability to benefit from it. The credit begins to phase out at a modified adjusted gross income of $59,000 for single filers and $118,000 for joint filers.
Q: What types of courses and programs don’t qualify?
A: Courses that are part of a program to acquire or improve job skills generally do not qualify. Also excluded are courses involving sports, games or hobbies unless they are part of a degree program.
Conclusion on Does Online Courses Qualify for Lifetime Learning Credit?
The Lifetime Learning Credit is an important tax benefit for those pursuing higher education through online and traditional programs. As long as the online courses are part of a formal degree or certificate program from an accredited institution, related expenses are eligible to be claimed. Be sure to consult a tax professional to understand your options for claiming education credits.