Who is eligible for the Education Tax Credit?
The full value of both education tax credits is available to married taxpayers filing jointly with an adjusted gross income (AGI of $80,000 or less and to single taxpayers with an AGI of $40,000 or less. The tax credits phase out gradually. Once married taxpayers’ AGI exceeds $100,000 or single taxpayers’ AGI exceeds $50,000, they are not eligible for these credits. The income limits will be adjusted for inflation after 2001. Also, taxpayers cannot use both credits for the same student in a single year nor may they combine these credits with tax-free withdrawals from education IRA’s. Individuals should save their records of tuition and financial aid for tax purposes. Colleges and universities will need to collect social security numbers from all students so they can issue information reports to assist families when they file their taxes.
