 Internal Revenue Service IRS tax news. Two tax credits that can help cover the cost of higher education. But first, an attempt at a joke, I apologize in advance. Wall Street is so confusing. I mean, first of all, is it a wall or a street? I'm guessing some politician named it during a border dispute. Half the people wanting border security, half wanting open borders. Politicians quote solving the problem, by collecting money for infrastructure, planning to build either a wall or a street. Then doing nothing, except naming the area Wall Street. A perfect compromise. It's kind of like an art student turning in a blank canvas and calling it something clever like a depiction of the inner workings of President Biden's mind. Half the population proclaiming, hey politician, what are you doing about the out of control immigration? Politicians stating, well, you know, we have been working on collecting tax revenue for the wall part of the street. Tax revenue paying for the clever name that is, don't say the quiet part out loud. The other half of the population proclaiming, hey politician, we need more immigration. Politician responding, well, we have been working on collecting tax revenue to improve the street. Tax revenue paying for the clever name that is, or maybe Wall Street was just an attempt to stop the bears with the wall, while attempting to let in the bulls at the same time with a street. IRS tax tip 2022-38, March 10th, 2022. Higher education is important to many people and it's often expensive. That's for sure, bit of an understatement possibly. Whether it's specialized job training or an advanced degree, there are a lot of costs associated with higher education. There are two education tax credits. There's a link to that here designed to help offset these costs. The American Opportunity Tax Credit and the Lifetime Learning Credit. There's links to those items here. Taxpayers who paid for higher education in 2021 can see these tax savings when they file their tax return. If taxpayers, their spouses or their dependents take post high school coursework, they may be eligible for a tax benefit. To claim either credit, taxpayers complete Form 8863 Education Credits. There's a link to that form here and file it with their tax return. These credits reduce the amount of tax someone owes. If the credit reduces the tax to less than zero, the taxpayer could even receive a refund to be eligible to claim either of these credits. A taxpayer or dependent must have received a form 1098T from an eligible educational institution. So you'll typically get the 1098T, which will give you the information needed, most likely to make the credits or to fill out the information with regards to the credits. So there are exceptions for some students. Here are some key things taxpayers should know about each of these credits. The American Opportunity Tax Credit is worth a maximum benefit of up to $2,500 per eligible student, only available for the first four years after eligible college or vocational school. So typically the American Opportunity Credit is the one, when you're thinking about these credits, by the way, you can generally take only one or the other of them, the one that would be most beneficial. Typically then first you're thinking about the American Opportunity Credit, which has likely the most possibility or the most benefit if you were able to get to it, but it's got the most restrictions as well. If you don't qualify for the American Opportunity Credit, then you're looking to the second credit, which might not be as advantageous, but you're still gonna get a benefit from it. So that's the general thought process you wanna be thinking about. For students pursuing a degree or other recognized education credential, partially refundable people could get up to 1,000 back. So when they say refundable, that means that if your tax liability goes below zero, you might still get money. You can call it back, but it's not really getting money back. It's not really a refund. That would mean it would be kind of more like a benefit type program at that point. So it's got like a refundable component or part to it. The Lifetime Learning Credit is, so if you can't qualify for the American Opportunity Credit, then you're saying, okay, well then can I qualify for the Lifetime Learning Credit? So it's worth a maximum benefit up to $2,000 per tax return per year, no matter how many students qualify, available for all years of post-secondary education and for courses to acquire or improve job skills, available for an unlimited number of tax years. Taxpayers can use the Interactive Tax Assistance Tool. There's a link to that on irs.gov to figure out if they're eligible for either of these credits. More information can be found at the links below, a Compare Education Credits link and a Publication 970 Tax Benefits for Education link. There's links to that here and other links that we talked about through this thing here and there'll be a link to this in the description.