DEFINITION of 'Lifetime Learning Credit'
A provision of the U.S. federal income tax code that lets parents and students lower their tax liability by up to $2,000 to help offset higher education expenses. The Lifetime Learning Credit matches dollar for dollar, up to the $2,000 limit, the amount that the parent or student spends on qualified education expenses for a student enrolled at an eligible post-secondary educational institution. This credit may be claimed year after year, but it cannot be combined with the Hope Credit or American Opportunity Credit in the same tax year.
BREAKING DOWN 'Lifetime Learning Credit'
The U.S. government subsidizes individuals' higher education expenses through a number of tax credits, tax deductions and tax-advantaged savings plans. Each of these programs lowers income tax liability for students or their parents. The subsidies include the Lifetime Learning, Hope and American Opportunity credits; tuition and fees, work-related education and student loan interest deductions; and Coverdell education savings accounts and 529 savings plans.