Lifetime Learning Credit Calculator: Estimate Your LLC

The Lifetime Learning Credit (LLC) is 20% of up to $10,000 of qualified tuition and fees — at most $2,000 per tax return — for any year of college or graduate school and for courses that build job skills. It is nonrefundable, has no limit on the number of years you can claim it, and phases out between $80,000 and $90,000 of modified AGI ($160,000–$180,000 joint). Enter your combined expenses below to estimate it.

This calculator is for informational purposes only. It gives an estimate from the figures you enter; your actual credit is figured on Form 8863, Part II, when you file.

How the calculation works

1. Expenses. Add the qualified tuition and fees for every student you are claiming the LLC for (you, your spouse, your dependents). Cap the total at $10,000.
2. Tentative credit. 20% of that total, so $2,000 at most (Form 8863, lines 10–12).
3. Phase-out. If MAGI is above $80,000 ($160,000 joint), multiply by ($90,000 − MAGI) ÷ $10,000, or ($180,000 − MAGI) ÷ $20,000 joint. At $90,000 ($180,000) or more the credit is zero (lines 13–18).
4. Tax limit. The credit cannot exceed your tax after other nonrefundable credits (line 19 and the Credit Limit Worksheet). The calculator shows any amount lost to this limit.

The phase-out comes from IRC §25A(d), which since 2021 sets fixed dollar thresholds that are not indexed for inflation — so 2025 and 2026 give the same result, and the tax-year menu does not change the math. The background is in the guide to the frozen LLC income limits.

What the inputs mean

• Total qualified education expenses. Tuition and fees required for enrollment, for all LLC students combined, paid during the year and reduced by tax-free scholarships, tax-free employer assistance and veterans' benefits.
• Number of students, student type, enrollment status. These are shown in the results for context. They do not change the math, because the LLC is a single per-return amount and has no enrollment minimum.
• Filing status and MAGI. MAGI is Form 1040 line 11 plus any excluded foreign or Puerto Rico income; the MAGI calculator walks through it. Married filing separately gets no credit.
• Tax liability before credits. Your income tax after any credits that come first, such as the child tax credit.

Who can claim the LLC

According to the Form 8863 instructions, the LLC is available for:

• Any year of postsecondary education. Undergraduate, graduate and professional degree programs all count, with no four-year cap.
• Courses to acquire or improve job skills, even without a degree goal. One course is enough.
• An unlimited number of tax years.
• Students with a felony drug conviction, who are barred from the AOTC but not from the LLC.

The school must be an eligible educational institution — a college, university, vocational school or other postsecondary school eligible for federal student aid programs. A coding bootcamp or an online course platform that is not such a school does not qualify, however job-relevant the course.

You cannot claim the LLC if you are married filing separately, if someone else claims you as a dependent, if your MAGI is $90,000 or more ($180,000 joint), or if you or your spouse was a nonresident alien for part of the year without electing resident status. For tax years beginning after 2025, the law also requires a Social Security number for the person claiming and for each student; an ITIN no longer qualifies.

What counts as a qualified expense

• Tuition and fees required for enrollment or attendance.
• Books, supplies and equipment only if they must be paid to the school as a condition of enrollment. A required textbook bought online counts for the American Opportunity credit but not for the LLC.
• Nonacademic fees (activity, athletic) only if every student must pay them to enroll.
• Not included: room and board, insurance, student health fees, transportation, and personal expenses.
• Not included: courses involving sports, games or hobbies, or noncredit courses, unless they are part of a degree program or help you acquire or improve job skills.

Expenses count in the year you pay them, for academic periods that start that year or in the first three months of the next. Expenses used for the LLC cannot also be used to make a 529 or Coverdell withdrawal tax-free.

Worked examples

Graduate student

Single, MAGI $65,000, tax before credits $3,000, master's tuition $8,000.

• 20% × $8,000 = $1,600
• No phase-out; tax is more than $1,600
• Tax drops from $3,000 to $1,400

Couple in the phase-out

Married filing jointly, MAGI $165,000, tax $14,000, one spouse's tuition $12,000.

• Expenses capped at $10,000 → $2,000
• Share kept: ($180,000 − $165,000) ÷ $20,000 = 75%
• Credit: $1,500

A $5,000 increase in pre-tax 401(k) deferrals would bring MAGI to $160,000 and restore the full $2,000.

Small tax bill

Single, MAGI $30,000, tax before credits $700, tuition $10,000.

• Tentative credit $2,000, but only $700 can be used
• The other $1,300 is lost — the LLC never produces a refund

Two students, one of them an undergraduate

A parent pays $6,000 of tuition for a first-year undergraduate and $7,000 for a graduate student. Putting both on the LLC gives 20% × $10,000 = $2,000. Claiming the American Opportunity credit for the undergraduate ($2,500) and the LLC for the graduate student (20% × $7,000 = $1,400) gives $3,900. Run that case in the education tax credits calculator, which picks the best credit for each student.

Employer tuition assistance

Tuition $12,000, of which the employer pays $5,250 tax-free under an educational assistance plan. Qualified expenses are $12,000 − $5,250 = $6,750, so the LLC is 20% × $6,750 = $1,350.

Reading your results

• Lifetime Learning Credit is the credit after the phase-out (Form 8863 line 18), before the tax limit.
• Phase-out reduction shows how much of the tentative credit your MAGI removed; it disappears below $80,000 ($160,000 joint).
• Actual tax reduction is the part of the credit your tax can absorb; it is smaller than the credit when your tax is low.
• Warnings flag MFS, income at or above the limit, and any credit lost because your tax is smaller than the credit.

Records to keep

The IRS can ask you to prove both enrollment and payment. Keep, for at least three years after filing:

• Form 1098-T from each school, and the school's account statement showing what was billed and paid in the calendar year.
• Receipts or card statements for tuition and any required fees or materials paid to the school.
• Scholarship, grant and employer-assistance award letters, so you can show which expenses were already covered tax-free.
• Course descriptions for job-skills classes that are not part of a degree program, showing how they relate to your work.

LLC or AOTC?

If a student qualifies for the American Opportunity credit, use it: on the same expenses it is always at least as large, it covers books bought anywhere, and 40% of it is refundable. The LLC is the right credit when the student:

• is in graduate or professional school,
• has completed four years of postsecondary study, or has had the AOTC claimed for four tax years,
• is enrolled less than half-time or is taking courses for job skills rather than a degree, or
• has a felony drug conviction.

The AOTC calculator shows the AOTC per student, including the refundable portion.

Other education tax breaks that stack with the LLC

• Student loan interest deduction. Up to $2,500 of interest a year, phased out for 2026 between $85,000 and $100,000 of MAGI ($175,000–$205,000 joint). It can be claimed in the same year as the LLC because it covers interest, not tuition. The student loan calculator estimates the interest you will pay.
• Employer educational assistance. Up to $5,250 a year tax-free, as in the example above; only the part you pay yourself can earn the credit.
• 529 plans. Use the 529 for costs the credit can't cover, such as housing, and pay at least the credit-eligible tuition from other money.

Common mistakes

1. Treating the $2,000 as per student. It is per return.
2. Counting textbooks bought elsewhere. Only required purchases paid to the school count for the LLC.
3. Expecting a refund. The LLC only reduces tax; with no tax due it is worth nothing.
4. Putting an AOTC-eligible undergraduate on the LLC. You give up as much as $2,500 per student.
5. Using Form 1098-T box 1 without checking. Box 1 shows payments the school received, which can differ from what you paid in the calendar year and does not subtract scholarships.
6. Filing separately. Married couples must file jointly to claim any education credit.