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Qualified education expenses computer series#

Eligibility for Coverdell Education Savings AccountsĮarnings within a Coverdell education savings account and distributions to pay for qualified education expenses are tax-free. Married taxpayers who file as married filing separately are ineligible. To qualify for interest-free treatment, the bond holder must have income under income phaseouts of $91,850 to $106,850 for single filers and $137,800 to $167,800 for married filing jointly in the year during which you cash in the bonds or roll them over into a 529 plan.

The savings bonds must have been issued in the taxpayer’s name, who must have been at least 24 years old before the bond issue date.

Qualified education expenses computer series#

Savings Bonds issued in 1990 or a later year and Series I U.S. Qualified education savings bonds include Series EE U.S. The qualified expenses are reduced by the amount of tax-free education benefits, the AOTC or LLTC, uses for the same expenses. The beneficiary of the 529 plan, prepaid tuition plan or Coverdell must be the taxpayer, the taxpayer’s spouse or the taxpayer’s dependent.

The qualified education expenses must have been paid for the education of the taxpayer, the taxpayer’s spouse or the taxpayer’s dependent. Qualified education expenses include tuition and required fees. Interest on qualified education savings bonds is tax-free when redeemed to pay for qualified education expenses or rolled over into a 529 college savings plan, prepaid tuition plan or Coverdell education savings account. Eligibility for the Education Savings Bond Program The student loan interest deduction has income phaseouts of $75,000 to $90,000 for single filers and $155,000 to $185,000 for married filing jointly. Interest paid by others is counted as though it were paid by the borrower. The taxpayer must have been legally obligated to pay the interest on the student loan. The borrower must not be claimed on someone else’s federal income tax return. The income phaseouts for the American Opportunity Tax Credit and Lifetime Learning Tax Credit are not adjusted for inflation. The student does not need to be enrolled on at least a half-time basis.Ĭoordination restrictions prevent claiming both the AOTC and LLTC for the same student in the same year.īoth tax credits have income phaseouts of $80,000 to $90,000 for single filers and $160,000 to $180,000 for married filing jointly. The LLTC is available for an unlimited number of years, and is often used for graduate students and continuing education.

The Lifetime Learning Tax Credit (LLTC) provides a non-refundable tax credit worth up to $2,000 base don 20% of the first $10,000 in qualified expenses.

Qualified expenses are otherwise reduced by tax-free educational assistance received for the same expenses. The AOTC can be claimed for qualified expenses that were paid with student loans. Students cannot claim the tax credit for themselves if they are claimed as a dependent on someone else’s federal income tax return (e.g., their parent’s tax return). The student must not have been convicted of a federal or state felony for the sale or possession of controlled substances. Expenses paid for academic periods that begin during the first three months of the next tax year may be counted as occurring during the current tax year if the expenses were paid during the current tax year. The student must be seeking a degree or certificate and enrolled on at least a half-time basis. It is mostly used for undergraduate students. The AOTC is limited to the first four years of postsecondary education and to four tax years for each student. Up to $1,000 (40%) of the tax credit may be refunded, except to certain taxpayers who are under age 24 as of the end of the tax year.

The American Opportunity Tax Credit (AOTC) provides a partially-refundable tax credit worth up to $2,500 based on 100% of the first $2,000 in qualified expenses and 25% of the second $2,000 in qualified expenses.