The Hope and lifetime learning credits are non-refundable tax credits available to individuals for out-of-pocket tuition expenses incurred by students pursuing college degrees, graduate degrees, or vocational training.

The Hope credit is available to certain students attending the first two years of post-secondary education.

The lifetime learning credit is available to students attending a post-secondary educational program and who are not eligible to take the Hope credit. Either the Hope credit or the lifetime learning credit can be claimed for each eligible student, but you cannot claim both.

Each student can elect whether to claim the Hope credit or lifetime learning credit, based on the credit with the most tax benefit.

• The Hope credit is limited on a per-student basis.
• The lifetime learning credit is limited on a per-household basis.

In addition to the Hope and lifetime learning credits, the tuition and fees deduction is also available to eligible students.

The Hope credit provides a maximum non-refundable tax credit of $1,650 per student for the first two years of post-secondary education. The Hope credit may be limited by your income and amount of tax. Only one education credit may be claimed for a student, including the Hope credit, lifetime learning credit, and the tuition and fees deduction.

• The student is completing the first two years of post-secondary education.
• The student is attending school to obtain an undergraduate degree or other recognized education credential.
• The student is enrolled for at least half-time of one academic period that began in the tax year.
• The student has no felony drug convictions on their record.
• The credit has not been claimed for the student in any prior two years.

The Hope credit is determined on a per-student basis. The amount of the credit is equal to the sum of:

• 100% of the first $1,100 of qualified expenses paid for the eligible student
• 50% of the next $1,100 of qualified expenses paid for the eligible student

The maximum amount of credit that can be claimed is $1,650 per student per year. The amount of the credit will be reduced or eliminated if you meet certain income limitations.

For more information see IRS Publication 970.

The lifetime learning credit provides a maximum non-refundable tax credit of $2,000 per year for all students attending an eligible educational institution in your household. The lifetime learning credit may be limited by your income and amount of tax. Only one education credit may be claimed for a student, including the Hope Credit, lifetime learning credit, and the tuition and fees deduction.

Any student enrolled in one or more courses at an eligible educational institution.

• The amount of the lifetime learning credit is 20% of the first $10,000 paid for eligible education expenses for all eligible students.
• The maximum amount of credit is $2,000 per household.
• The amount of the credit will be reduced or eliminated if you meet certain income limitations.

• You paid qualified higher education expenses for an eligible student.
• The eligible student is yourself, your spouse, or a dependent for whom you are claiming an exemption.
• The expenses were paid for the current tax year or the first three months of the succeeding tax year.
• Your filing status is single, head of household, qualifying widow(er), or married filing jointly.
• You cannot be claimed as a dependent on another person's tax return.
• Your modified adjusted gross income is less than $110,000 for married filing jointly filing status, or $55,000 for all other eligible filing statuses.
• You are not claiming the lifetime learning credit  or the tuition and fees deduction  for the same student.

• Expenses are for tuition and related expenses required for enrollment or attendance at an eligible educational institution.
• An eligible educational institution is a college, university, vocational school, or other post-secondary educational  institution eligible to participate in a student aid program administrated by the Department of Education.
• Related expenses include student activity fees, expenses for course-related books, supplies, and equipment included in education expenses. These expenses must be paid to the institution as part of enrollment or attendance requirements.
• The expenses are not paid with a tax-free scholarship, fellowship, grant, or through an employer-provided education assistance program. This includes Pell Grants and Veterans' educational assistance.

• Room and board
• Insurance
• Transportation
• Medical expenses
• Expenses related to sports, games, hobbies, and non-credit courses, unless the course is required as part of the degree program 

The amount of the Hope credit is reduced or eliminated if your modified adjusted gross income (MAGI) exceeds limits based on your filing status.

If your filing status is married filing jointly the credit is reduced when your MAGI exceeds $94,000 and is eliminated when your MAGI is greater than $114,000.

If your filing status is any other qualified filing status besides married filing jointly, the credit is gradually reduced when your MAGI exceeds $47,000 and is eliminated when your MAGI is greater than $57,000.

 To claim either credit, complete Form 8863 and attach the form to your Form 1040 or Form 1040A.

For more information see IRS Publication 970.