2021 Lifetime Learning Credit
For 2021, the Lifetime Learning Credit figures are $2,000 (Maximum credit), 20% (Rate on qualified expenses), $10,000 (Qualified expenses limit) and 2 more figures below.
Effective 2021-01-01Source: Publication 970 (2021), Tax Benefits for Education (IRS)Verified 2026-09-03
Compared with 2020
| Item | 2020 | 2021 | Change |
|---|---|---|---|
| Maximum credit | $2,000 | $2,000 | +$0 (+0.0%) |
| Rate on qualified expenses | 20% | 20% | +0% (+0.0%) |
| Qualified expenses limit | $10,000 | $10,000 | +$0 (+0.0%) |
| MAGI limit, single filers | $69,000 | $90,000 | +$21,000 (+30.4%) |
| MAGI limit, joint filers | $138,000 | $180,000 | +$42,000 (+30.4%) |
Who it applies to
Taxpayers who paid qualified education expenses in 2021 for themselves, their spouse, or a dependent claimed on their return, and who meet the income and other eligibility requirements.
What changed this year, and why
The Lifetime Learning Credit for 2021 allows a nonrefundable credit of up to $2,000 per tax return. The credit is 20% of qualified education expenses, with qualifying expenses limited to $10,000 per return.
Common questions
- What is the maximum Lifetime Learning Credit for 2021?
- The maximum Lifetime Learning Credit is $2,000 per tax return. The credit equals 20% of qualified education expenses, and expenses count up to a limit of $10,000 per return.
- Did the credit amount change from 2020 to 2021?
- No. The 2020 Lifetime Learning Credit also had a maximum of $2,000, a 20% rate, and a $10,000 qualified expenses limit.
Every amount on this page is a published figure rather than yours. The Lifetime Learning Credit calculator takes the number you enter and works it out against them, showing which published figure it used.
The cap is per tax return, not per student
The Lifetime Learning Credit caps at $2,000 per tax return, regardless of how many students you paid expenses for. This is different from some other education benefits that apply per student. If you have multiple eligible students in your household, you still cannot claim more than $2,000 total on your return. The credit equals 20% of qualified education expenses, up to $10,000 of expenses per return, so the math works out to the same $2,000 ceiling whether you have one student or several. You cannot multiply the credit by the number of students you support.
Maximum credit Up to $2,000 credit per return
Publication 970 (2021), Tax Benefits for Education (IRS)
It can wipe out your tax but never pays you back
The lifetime learning credit is nonrefundable, meaning it can reduce your income tax liability to zero but cannot generate a refund on its own. If you owe tax and the credit exceeds what you owe, the excess is simply lost - you do not receive the difference as a refund payment. The credit equals 20% of qualified education expenses, capped at $10,000 of expenses, which produces the maximum credit of $2,000. This ceiling applies regardless of how many students you claim or how much you actually paid in tuition. Taxpayers with little or no tax liability in a given year may not benefit fully from the credit, but they remain eligible to claim it again in future years when their tax situation differs.
The lifetime learning credit is a nonrefunda- ble credit. This means that it can reduce your tax to zero, but if the credit is more than your tax, the excess won't be refunded to you.
Publication 970 (2021), Tax Benefits for Education (IRS)
There is no cap on how many years you claim it
Unlike some education tax benefits that are limited to the first few years of postsecondary study, the lifetime learning credit can be claimed for an unlimited number of tax years. There is no cap on how many years you may claim it for any given eligible student. Whether the student is in their first year of college or taking courses decades later, the credit remains available each year they enroll in qualifying classes. The maximum credit per return is $2,000, calculated as 20% of up to $10,000 in qualified education expenses. As long as the taxpayer meets the eligibility requirements - including the income thresholds - the credit can be used year after year without expiration.
There is no limit on the num- ber of years the lifetime learning credit can be claimed for each student.
Publication 970 (2021), Tax Benefits for Education (IRS)
A single course to improve job skills qualifies
You do not need to be enrolled in a degree program to claim the lifetime learning credit. The credit is available for courses taken to acquire or improve job skills, even if the student is not pursuing a credential. A single class at an eligible educational institution can qualify. Courses involving sports, games, hobbies, or noncredit instruction generally do not count, unless they are part of a degree program or are taken to acquire or improve job skills. The maximum credit is $2,000 per return, calculated as 20% of qualified expenses up to $10,000. There is no limit on the number of years you may claim the credit, so you can use it repeatedly for job-related courses throughout your career.
However, if the course of instruction or other education is part of the student's degree program or is taken by the student to acquire or improve job skills, these expenses can qualify.
Publication 970 (2021), Tax Benefits for Education (IRS)
One student, one credit, one year
For each student in each tax year, you may claim only one education credit - either the American opportunity credit or the lifetime learning credit, never both for the same student. If you have multiple students, you could claim different credits for different students, but for any single student in a given year, you must choose. The IRS notes that when you have the choice, the American opportunity credit will always produce a larger benefit than the lifetime learning credit, so it is generally the better option for eligible students in their first four years of postsecondary education.
If you are eligible to claim the lifetime learning credit and you are also eligible to claim the American opportu- nity credit for the same student in the same year, you can choose to claim either credit, but not both.
Publication 970 (2021), Tax Benefits for Education (IRS)
The income at which you lose the credit entirely
The lifetime learning credit phases out completely once your modified adjusted gross income reaches certain thresholds. For 2021, you cannot claim the credit at all if your MAGI is $90,000 or more when filing as single, head of household, or qualifying widow(er), or $180,000 or more if filing married filing jointly. The credit begins to phase out before reaching these upper limits, so taxpayers with income just below the cutoff may receive a reduced credit. There is no partial credit available once you reach or exceed these amounts. The credit itself is 20% of qualified expenses up to $10,000, which produces the maximum benefit of $2,000 for those who qualify.
Your modified adjusted gross income (MAGI) is $90,000 or more ($180,000 or more if filing married fil- ing jointly).
Publication 970 (2021), Tax Benefits for Education (IRS)
Filing separately from your spouse blocks the credit entirely
For 2021, the IRS blocks the Lifetime Learning Credit entirely for anyone whose filing status is married filing separately. Even if a married couple otherwise meets every other requirement for the credit - such as having qualified education expenses and falling within the income limits - the moment one spouse elects to file separately from the other, neither spouse can claim the credit. This means that married couples who want to benefit from the Lifetime Learning Credit must file a joint return. The rule applies regardless of how much either spouse earned or paid for education during the year. Taxpayers who are married but cannot or choose not to file jointly should plan on receiving no Lifetime Learning Credit at all for that tax year.
You can't claim the lifetime learning credit for 2021 if any of the following apply. • Your filing status is married filing separately.
Publication 970 (2021), Tax Benefits for Education (IRS)
Paying in December for a term that starts in January still counts for this year
The heading describes a timing rule for when a payment counts toward a tax year. For the 2021 Lifetime Learning Credit, qualified education expenses paid during 2021 count toward the 2021 credit even if the academic period they cover begins in January, February, or March of 2022. This means a student who pays tuition in December 2021 for the spring 2022 semester can use those expenses when figuring the 2021 credit. The rule applies whether the expenses are for the taxpayer, a spouse, or a dependent claimed on the return. The credit itself is 20% of up to $10,000 of qualified expenses, so the maximum credit is $2,000. Keep records showing the payment date and the start date of the academic period in case the IRS questions which year the expenses belong to.
For 2021, treat an academic period beginning in the first 3 months of 2022 as if it began in 2021 if qualified education expenses for the student were paid in 2021 for that academic period. See Prepaid expenses, later.
Publication 970 (2021), Tax Benefits for Education (IRS)
The form that claims it, and where the credit lands on your return
For the 2021 tax year, you claim the Lifetime Learning Credit by completing IRS Form 8863 and attaching it to your federal income tax return (Form 1040 or 1040-SR). The credit amount is then entered on Schedule 3 (Form 1040), line 3, where it reduces your total tax liability dollar for dollar. The Lifetime Learning Credit is calculated as 20% of up to $10,000 in qualified education expenses, resulting in a maximum credit of $2,000 per tax return. Both the taxpayer and the student must have valid taxpayer identification numbers. The IRS provides an example in Appendix A of Publication 970 showing how to complete Form 8863 when both the American Opportunity Credit and the Lifetime Learning Credit are claimed on the same return.
You claim the lifetime learning credit by completing Form 8863 and submitting it with your Form 1040 or 1040-SR. Enter the credit on Schedule 3 (Form 1040), line 3.
Publication 970 (2021), Tax Benefits for Education (IRS)
A tuition refund that arrives after you file makes you repay part of the credit
If a taxpayer receives a refund of qualified education expenses after filing their 2021 federal income tax return, they may need to repay part or all of the Lifetime Learning Credit they claimed. This is called credit recapture. The taxpayer must refigure the credit by reducing the qualified education expenses by the amount of the refund or any tax-free educational assistance received after filing. If the refigured credit is less than the credit originally claimed, the difference must be repaid as additional tax on the return for the year the refund is received. For 2021, the credit is 20% of up to $10,000 of qualified expenses, with a maximum credit of $2,000. Keep records of any refunds or tax-free assistance received after filing to correctly calculate any recapture amount.
Credit recapture. If any tax-free educational assistance for the qualified education expenses paid in 2021, or any refund of your qualified education expenses paid in 2021, is received after you file your 2021 income tax return, you must recapture (repay) any excess credit. You do this by refiguring the amount of your adjusted qualified education expenses for 2021 by reducing the expenses by the amount of the refund or tax-free educational assistance.
Publication 970 (2021), Tax Benefits for Education (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Publication 970 (2021), Tax Benefits for Education (IRS)
- Maximum credit
Maximum credit Up to $2,000 credit per return
- Rate on qualified expenses
The amount of the lifetime learning credit is 20% of the first $10,000 of qualified education expenses you paid for all eligible students.
- Qualified expenses limit
The amount of the lifetime learning credit is 20% of the first $10,000 of qualified education expenses you paid for all eligible students.
- MAGI limit, single filers
Limit on modified adjusted gross income (MAGI) $180,000 if married filling jointly; $90,000 if single, head of household, or qualifying widow(er)
- MAGI limit, joint filers
Limit on modified adjusted gross income (MAGI) $180,000 if married filling jointly; $90,000 if single, head of household, or qualifying widow(er)