Education Credit


DEFINITION of 'Education Credit'

A type of tax credit available to students of a post-secondary educational institution, such as a college or university. Education credits may be claimed by those who incur qualifying educational expenses, such as tuition and fees. Parents who pay these expenses for their children may be able to claim this type of credit on their tax returns, subject to certain income restrictions.

BREAKING DOWN 'Education Credit'

There are two types of education credits, the Hope Credit and the Lifetime Learning Credit. The Hope Credit applies to first and second year postsecondary students, with certain restrictions. The Lifetime Learning Credit applies to all students at the undergraduate or graduate level. You cannot claim both the Hope and Lifetime Learning Credits for the same student in the same year.

  1. American Opportunity Tax Credit

    A tax credit that enabled more student and parents to pay for ...
  2. Joseph M. Katz Graduate School ...

    The business school at the University of Pittsburgh. The Joseph ...
  3. Hope Credit

    A nonrefundable education tax credit that can be claimed for ...
  4. Education Loan

    Money borrowed to finance education or school related expenses. ...
  5. Lifetime Learning Credit

    A provision of the U.S. federal income tax code that lets parents ...
  6. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
Related Articles
  1. Taxes

    5 Smart Ways To Use Your Tax Return

    This year, find out how to stretch your tax refund further to strengthen your future.
  2. Taxes

    Clearing Up Tax Confusion For College Savings Accounts

    Put your kids through school without being hounded by the tax man.
  3. Taxes

    Tax-Efficient Wealth Transfer

    Taxpayers with large taxable estates were required to take steps to reduce them before 2011.
  4. Taxes

    5 Tax Credits You Shouldn't Miss

    If you're not taking advantage of these deductions, you could be missing out on tax savings.
  5. Taxes

    10 Most Overlooked Tax Deductions

    The receipts you cram into your wallet could be replaced with cash come tax season.
  6. Taxes

    Give Your Taxes Some Credit

    A few tax credits can greatly increase the amount of money you get back on your return.
  7. Economics

    Explaining Fair Market Value

    Fair market value is the price at which a buyer and seller are willing to exchange a good.
  8. Investing

    How Does Depreciation Reduce My Tax Bill?

    How the depreciation tax rule can assist real estate investors.
  9. Professionals

    Career Advice: Accounting Vs. Law

    Identify the key differences between working in accounting and working in law. Understand which specific skills make you better-suited for each career.
  10. Professionals

    Want to Be High-Earner? Avoid these College Majors

    Why these college majors might offer a poor chance of paying off those student loans sooner rather than later.
  1. Do financial advisors prepare tax returns for clients?

    Financial advisors engage in a wide variety of financial areas, including tax return preparation and tax planning for their ... Read Full Answer >>
  2. Student loans, federal and private: what's the difference?

    The cost of a college education now rivals many home prices, making student loans a huge debt that many young people face ... Read Full Answer >>
  3. Can I use my IRA to pay for my college loans?

    If you are older than 59.5 and have been contributing to your IRA for more than five years, you may withdraw funds to pay ... Read Full Answer >>
  4. Can I use my 401(k) to pay for my college loans?

    If you are over 59.5, or separate from your plan-sponsoring employer after age 55, you are free to use your 401(k) to pay ... Read Full Answer >>
  5. What are the best free online calculators for calculating my taxable income?

    Free online calculators for determining your taxable income are located at, and Determining ... Read Full Answer >>
  6. What is the difference between comprehensive income and gross income?

    Comprehensive income and gross income are similar, but comprehensive income is a specific term used on a company's financial ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  2. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  3. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  4. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  5. Cost Of Funds

    The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!