AOTC vs. LLC at a glance
Here’s how the two credits stack up:
| AOTC | LLC | |
|---|---|---|
| Maximum credit | $2,500 per student | $2,000 per return |
| Refundable? | Up to 40% | No |
| Year limit | First four years of college | No limit |
| Qualifying expenses | Tuition, fees, course materials | Qualified tuition and related expenses |
Source: Internal Revenue Service
Who can claim education tax credits
You may be able to claim an education tax credit for qualified expenses paid for:
- Yourself
- Your spouse
- Dependent student
If claiming a dependent, you can take the credit even if the student paid the tuition themselves.
Income limits for education tax credits
Both the AOTC and LLC phase out at the same income levels. The credits start to phase out between $80,000 and $90,000, and between $160,000 and $180,000 for joint filers. Once income exceeds that range, you are no longer eligible for the credits.
Which credit fits your situation
If your student is in their first four years of college and enrolled at least half-time, the AOTC usually pays off more. For grad school, part-time courses, or job-skills classes, you may qualify for the Lifetime Learning Credit since it has no limit on the number of years you can claim it.
If you’re also paying off student loans, see whether the student loan interest deduction can lower your tax bill.
How to claim an education credit
Claim either credit using Form 8863, attached to your Form 1040. You’ll typically need Form 1098-T from the school to confirm your qualified education expenses. Starting in 2026, the IRS also requires a valid Social Security number for the student to claim either credit.
Mistakes that can cost you the credit
There are a couple of common mistakes you’ll want to avoid, including:
- Claiming an education credit for expenses covered by a tax-free scholarship or grant
- Claiming both credits for the same student in the same tax year
You may also want to hold onto your 1098-T and receipts in case you need to prove eligibility.
