lifetime learning credit

Forum|Forum|2 years ago
March 12, 2024
2 replies
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so if my daughter file independently and her W2 made only 8000 for tax year 2023, then she will not get the lifetime learning credit of $2000?

she made $30,000 last year and got a $2000 LLC credit

From my understanding , there is a lower limit necessary to get the LLC

so if no income made for tax year 2023, you get nothing because LLC used only to lower the taxes that you owe, right?

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Pip_12_mn

See Pub 970 page 26 for a list of reasons she might not qualify.

The income limit is you have to make LESS THAN $90K single filer.

I found one of the restrictions shown below confusing and can't find the details in the body of the publication, can a TT Expert clarify this?

KrisD15

Right, the Lifetime Learning Credit is "Non-refundable" which means it is only applied to tax liability.

As a side note, if your daughter is a student and was under 24 in 2023, are you sure you should not be claiming her as a dependent?

@stantonporsche

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Pip_12_mn

Now I understand:

"A nonrefundable tax credit is a reduction in the amount of income taxes that a taxpayer owes. It can reduce the amount owed to zero, but no further."

Good point about the dependency thing. In my case my 23 year old was only a student for 4 months of the year so she could not be claimed as a dependent. Per IRS Guidelines:

A full-time student is a student who is enrolled for the number of hours or courses that the school considers to be full-time attendance.

To qualify as a student, the person must be, during some part of each of any five calendar months of the year:

A full-time student at a school that has a regular teaching staff, course of study, and a regularly enrolled student body at the school, or
A student taking a full-time, on-farm training course given by a school described in (1), or by a state, county, or local government agency.

The five calendar months do not have to be consecutive.