AOTC Vs LLC Education Credits: What Are The Differences?

Navigating the world of benefits, credits, and costs can be difficult, so it's critical to do your study in order to claim accurately and receive everything you're entitled to.

Education credits come in several categories. There are some similarities between the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC), but also some distinctions.

AOTC and LLC lower a taxpayer's income tax liability dollar-for-dollar for eligible education expenses.

What are education credits?

No. It is critical to understand that there are no 'double returns,' and that each claimant may only use one of these advantages per student and per tax year.

Can I claim both LLC and AOTC?

Each credit has its own set of regulations, although you must first meet all three of the following conditions for both:

Who can claim an education credit?

a) You, your dependent or a third party pays qualified education expenses for higher education. b) An eligible student must be enrolled at an eligible educational institution.

Perhaps the most significant distinction here is that AOTC is primarily concerned with assisting college students in their studies.

LLC vs. AOTC: key differences

It can only be claimed for four years (LLC can be claimed indefinitely), and the student must be pursuing a degree or other approved educational certification.

Furthermore, for AOTC, students must be enrolled at least half-time for at least one academic term.

Meanwhile, LLCs are more adaptable in this sense, as they are meant to let adults earn extra certifications while working and to cover all years of post-secondary education.