Academics · Subject Resources

Two credits.
One that fits.

The federal government gives back part of what families pay for college through two tax credits with different rules. Enter your filing status, income and each student’s costs and aid, and the guide picks the credit that fits each student, takes out tax-free aid, applies the income limit and shows what part could come back as a refund.

Work out a tax yearWhat you get

Tax years

The worked example is made up: two students in one family, a first-year student whose grant covered everything, and an adult learner over the income limit. Saved on this device only.

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What you get

Academics · Subject ResourcesFree

What you finish with
A record per household and tax year: filing status, income and dependency; each student’s qualified expenses, tax-free aid, prior claims and enrollment; notes and five checks. Picks the credit per student, estimates both credits after the phase-out and the refundable part, and prints a one-page summary for whoever prepares the return.
Who it is for
Parents and caregivers paying for college, college students who file their own return and adults taking courses for work.
Format
Browser organizer with a saved record per tax year. Prints the credit summary, the full record, every year in a table or a blank form; downloads a spreadsheet (.csv); exports and imports a file.
Access
Free. No account, no sign-in and nothing to install. Everything you type stays in this browser; nothing is sent to Caveat.
Where it lives
The Subject Resources space in Caveat Academics.
Support
Questions about access, an order or a correction: team@caveatacademic.com.

How to use it

  1. Enter the filing status and income.
  2. Add each student with costs and aid.
  3. Read which credit fits each one.
  4. Check the 1098-T and receipts.
  5. Print the summary for the preparer.

Work out a tax year

How the credits work

The two federal education creditsAmerican opportunityLifetime learningMost per year$2,500 per student$2,000 per returnHow it is figured100% of $2,000, then 25% of $2,00020% of up to $10,000RefundableUp to 40%, so up to $1,000NoYears availableFirst 4 years of college, 4 claimsNo limitEnrollmentHalf time, toward a degreeAny course, even oneBooks and suppliesRequired ones countOnly if paid to the schoolIncome phase-out$80k to $90k; joint $160k to $180kThe same rangesThe two federal education creditsMost per yearAmerican opportunity: $2,500 per studentLifetime learning: $2,000 per returnHow it is figuredAmerican opportunity: 100% of $2,000,then 25% of $2,000Lifetime learning: 20% of up to $10,000RefundableAmerican opportunity: Up to 40%, so upto $1,000Lifetime learning: NoYears availableAmerican opportunity: First 4 years ofcollege, 4 claimsLifetime learning: No limitEnrollmentAmerican opportunity: Half time, towarda degreeLifetime learning: Any course, even oneBooks and suppliesAmerican opportunity: Required onescountLifetime learning: Only if paid to theschoolIncome phase-outAmerican opportunity: $80k to $90k;joint $160k to $180kLifetime learning: The same ranges
One student, one credit per year: you cannot take both for the same student.

Take aid out first

A credit is figured on what you paid, after tax-free help. If tuition was $5,200 and a scholarship covered $1,500, the credit is based on $3,700. Room, board, transportation and insurance never count, even when the school bills them.

The income limit is a slope

Between $80,000 and $90,000 of modified adjusted gross income ($160,000 to $180,000 for joint filers) the credit shrinks a little for every dollar. At $168,000 joint, a family keeps 60 percent of the credit; at $180,000 nothing is left.

Refundable means a check

Up to 40 percent of the American opportunity credit, at most $1,000, is paid even if you owe no tax. The rest of it, and all of the lifetime learning credit, can only lower tax you owe.

Sources

  1. Internal Revenue Service. Publication 970, Tax Benefits for Education, and the Instructions for Form 8863, Education Credits.
  2. Internal Revenue Service. American Opportunity Tax Credit; Lifetime Learning Credit; Compare Education Credits (irs.gov).
  3. Internal Revenue Service. New Social Security number requirements for education tax credits (irs.gov, EITC Central).
  4. Internal Revenue Code section 25A.

The worked example is made up. The estimate uses the federal rules as of 2026 and the figures you enter; it does not check your tax liability, state credits or every eligibility rule, and it is not tax advice. A tax preparer or a free VITA site can confirm it. Nothing you type is sent to Caveat. Support: team@caveatacademic.com.