The American Opportunity Credit and the Lifetime Learning Credit are two federal tax credits available to help offset the costs of higher education. To qualify for either credit, you must pay postsecondary tuition and fees for yourself, your spouse or your dependent. The credit may be claimed by the parent or the student, but not by both. If the student was claimed as a dependent, the student cannot file for the credit.

For each student, you can choose to claim only one of the credits in a single tax year. You cannot claim the American Opportunity Credit to pay for part of your daughter’s tuition charges and then claim the Lifetime Learning Credit for $2,000 more of her school costs.

The American Opportunity Credit can be up to $2,500 per eligible student, is available for the first four years of post-secondary education and 40 percent of it is refundable. The full credit is generally available to eligible taxpayers who make less than $80,000 or $160,000 for married couples filing a joint return.

The Lifetime Learning Credit can be up to $2,000 per eligible student, is available for all years of postsecondary education and for courses to acquire or improve job skills, and is generally available to eligible taxpayers who make less than $60,000 or $120,000 for married couples filing a joint return.