Which of the following statements is true regarding the education tax credits?

Which of the following statements is true regarding the education tax credits?

a. The lifetime learning credit is available for qualifying tuition and related expenses incurred by students pursuing only graduate degrees.

b. The American Opportunity credit permits a maximum credit of 20% of qualified expenses up to $10,000 per year.

c. The American Opportunity credit is calculated per taxpayer, while the lifetime learning credit is available per eligible student.

d. Continuing education expenses do not qualify for either education credit.

e. None of the above statements is true.

Answer: e. None of the above statements is true.

The Lifetime Learning Credit does not have limitations for graduate students. It is valid for all educational programs for undergraduate, graduate, and professional degrees and those aimed at obtaining or upgrading a skill. Instead of 20% of up to $ 10,000, the American Opportunity Credit enables a maximum credit of 100% of the first $ 2,000 of qualified expenses and 25% of the next $ 2,000 for the total max credit for each eligible student per year of $2500. However, the American Opportunity Credit is claimed per eligible student in a classroom, not per taxpayer While the Lifetime Learning Credit, as earlier noted, is claimed per taxpayer. This implies that a family was free to claim more than one American Opportunity Credit if such a family had more than one eligible student, but only one Lifetime Learning Credit on a tax return. Thus, as has been previously mentioned, the expenses associated with continuing education can also be eligible for the Lifetime Learning Credit, which means that the fourth statement is also false. For instance, a course pursued to gain enhanced job skills in a business being carried out by a taxpayer makes him/her eligible for the Lifetime Learning Credit on expenses incurred. Equally, a parent with two college students could be in a position to claim two American Opportunity Credits, one for each college student, thus the argument that this credit is per eligible student, not per taxpayer as stated in option C.