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Comparison of education tax credits and deductions

  Hope credit1 Lifetime Learning credit Student loan interest deduction Deduction for qualified higher education expenses
Credit/deduction applies to Qualified tuition and related expenses for first four years of undergraduate education Qualified tuition and related expenses for courses taken throughout lifetime to improve or acquire job skills Interest paid on a qualified student loan Not available in 2010
Qualified education expenses include room and board? No No Yes N/A
Amount of credit/deduction in 2010 $2,500 maximum $2,000 maximum $2,500 maximum N/A
Income limits on who is eligible to take credit/deduction in 2010

Single filers: full credit available if modified adjusted gross income (MAGI) $80,000 or less (same in 2009)

Partial credit available if MAGI between $80,000 and $90,000 (same in 2009)

Joint filers: full credit available if MAGI $160,000 or less (same in 2009)

Partial credit available if MAGI between $160,000 and $180,000 (same in 2009)

Single filers: full credit available if modified adjusted gross income (MAGI) $50,000 or less (same in 2009)

Partial credit available if MAGI between $50,000 and $60,000 (same in 2009)

Joint filers: full credit available if MAGI $100,000 or less (same in 2009)

Partial credit available if MAGI between $100,000 and $120,000 (same in 2009)

Single filers: full deduction available if modified adjusted gross income (MAGI) $60,000 or less (same in 2009)

Partial deduction available if MAGI between $60,000 and $75,000 (same in 2009)

Joint filers: full deduction available if MAGI $120,000 or less (same in 2009)

Partial deduction available if MAGI between $120,000 and $150,000 (same in 2009)

N/A
Less than half-time students or graduate students eligible? No Yes Less than half-time--no; graduate students--yes N/A
Limit on number of students in family for whom credit/deduction can be taken in same year? No No, but the annual credit is limited to $2,000 per tax return No; if applicable, parents can claim the deduction for more than one child in the same year N/A
Credit/deduction available in same year as tax-free distribution from a Coverdell education savings account? Yes Yes Yes N/A
Must student be enrolled for a degree or in other program leading to an educational credential? Yes No Yes N/A
Allowed if student has a controlled substance conviction? No Yes Yes N/A

Notes:

1 For 2009 and 2010, the Hope credit is renamed the American Opportunity tax credit.