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Publication 970

Figuring the Credit(p29)

The amount of the lifetime learning credit is 20% of the first $10,000 of qualified education expenses you paid for all eligible students. The maximum amount of lifetime learning credit you can claim for 2017 is $2,000 (20% × $10,000). However, that amount may be reduced based on your MAGI. See Effect of the Amount of Your Income on the Amount of Your Credit, later.


Bruce and Toni Harper are married and file a joint tax return. For 2017, their MAGI is $75,000. Toni is attending a local college (an eligible educational institution) to earn credits toward a degree in nursing. She already has a bachelor's degree in history and wants to become a nurse. In August 2017, Toni paid $5,000 of qualified education expenses for her fall 2017 semester. Bruce and Toni can claim a $1,000 (20% × $5,000) lifetime learning credit on their 2017 joint tax return.

Form 1098-T.(p29)

To help you figure your lifetime learning credit, the student may receive Form 1098-T. Generally, an eligible educational institution (such as a college or university) must send Form 1098-T (or acceptable substitute) to each enrolled student by January 31, 2018. An institution may choose to report either payments received (box 1), or amounts billed (box 2), for qualified education expenses. However, the amounts on Form 1098-T, boxes 1 and 2, might be different from what you paid. When figuring the credit, use only the amounts you paid or are deemed to have paid in 2017 for qualified education expenses.
In addition, Form 1098-T should give other information for that institution, such as adjustments made for prior years, the amount of scholarships or grants, reimbursements or refunds, and whether the student was enrolled at least half-time or was a graduate student.
The eligible educational institution may ask for a completed Form W-9S or similar statement to obtain the student's name, address, and taxpayer identification number.

Effect of the Amount of Your Income on the Amount of Your Credit(p30)

The amount of your lifetime learning credit is phased out (gradually reduced) if your MAGI is between $56,000 and $66,000 ($112,000 and $132,000 if you file a joint return). You can't claim a lifetime learning credit if your MAGI is $66,000 or more ($132,000 or more if you file a joint return).

Modified adjusted gross income (MAGI).(p30)

For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return.
MAGI when using Form 1040A.(p30)
If you file Form 1040A, your MAGI is the AGI on line 22 of that form.
MAGI when using Form 1040.(p30)
If you file Form 1040, your MAGI is the AGI on line 38 of that form, modified by adding back any:
  1. Foreign earned income exclusion,
  2. Foreign housing exclusion,
  3. Foreign housing deduction,
  4. Exclusion of income by bona fide residents of American Samoa, and
  5. Exclusion of income by bona fide residents of Puerto Rico.
You can use Worksheet 3-1 to figure your MAGI.
Worksheet 3-1. MAGI for the Lifetime
Learning Credit
1.Enter your adjusted gross income
(Form 1040, line 38)
2.Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45; or Form 2555-EZ, line 18) 2.  
3.Enter your foreign housing deduction (Form 2555, line 50) 3.  
4.Enter the amount of income from Puerto Rico you’re excluding 4.  
5.Enter the amount of income from American Samoa you’re excluding (Form 4563, line 15) 5.  
6.Add the amounts on
lines 2, 3, 4, and 5
7.Add the amounts on lines 1 and 6.
This is your modified adjusted gross income. Enter this amount
on Form 8863, line 14


If your MAGI is within the range of incomes where the credit must be reduced, you will figure your reduced credit using lines 10–18 of Form 8863. The same method is shown in the following example.


You are filing a joint return with a MAGI of $113,000. In 2017, you paid $6,600 of qualified education expenses.
You figure the tentative lifetime learning credit (20% of the first $10,000 of qualified education expenses you paid for all eligible students). The result is a $1,320 (20% x $6,600) tentative credit.
Because your MAGI is within the range of incomes where the credit must be reduced, you must multiply your tentative credit ($1,320) by a fraction. The numerator (top part) of the fraction is $132,000 (the upper limit for those filing a joint return) minus your MAGI. The denominator (bottom part) is $20,000, the range of incomes for the phaseout ($112,000 to $132,000). The result is the amount of your phased out (reduced) lifetime learning credit ($1,254).
 $1,320×$132,000–$113,000 =$1,254