The 1997 Taxpayer Relief Act offers significant benefits to graduate students paying for their tuition and fees. The Lifetime Learning Credit is available for tuition and fees paid after June 30, 1998. There also is a possible reduction in taxable income by deducting student loan interest payments. Tax relief is subject to income limits. More information about education related tax benefits is available in the IRS Publication 970, Tax Benefits for Education, or in the NASFAA Tax Benefits Guide.
Loan Interest Payment Deductions
You may be able to deduct the amount of interest you paid on student loans by up to $2,500 pear year. If you paid $600 or more of interest on a qualified student loan during the year, you will receive a Student Loan Interest Statement (1009-E), from the financial institutions, governmental units (or any subsidiary agencies), educational institutions or any other person to whom you had paid the interst to in the course of their trade or business. View description of eligibility on the IRS website.
Lifetime Learning Credit
The Lifetime Learning Credit applies to graduate students and working Americans who are pursuing lifelong learning to upgrade their skills. Visit the Tax Benefits Guide for more information. For those beyond the first two years of college, or who are taking classes part-time to improve or upgrade job skills, the family will receive a 20% tax credit for the first $10,000 spent on tuition. The credit is available on a per-taxpayer (family) basis and is available for tax filers whose modified adjusted gross income is $60,000 or less for single filers, or $120,000 or less for married couples filing jointly.
Take advantage of the Lifetime Learning tax credit at Form 8863 Education Credits (American Opportunity and Lifetime Learning Credits), which requires Adobe Acrobat Reader to view and print.
Information about money that has been paid for tuition or any scholarships or fellowships is available in the 1098-T found under the Financials tab of Student Self Service in University Student Information System (SIS).