Can I claim the Lifetime Learning Credit for continuing education courses?

by | May 9, 2025 | Individual Taxes, Tax Credits

Here’s what HIVE AI had to say about “Can I claim the Lifetime Learning Credit for continuing education courses?”:

Lifetime Learning Credit for Continuing Education Courses

Yes, you can claim the Lifetime Learning Credit (LLC) for continuing education courses, making it an excellent option for professionals taking courses to maintain or improve job skills, as well as for those pursuing graduate-level education or taking classes without being enrolled in a degree program.

Eligibility for Continuing Education

The Lifetime Learning Credit is specifically designed to accommodate continuing education needs:

The Lifetime Learning Credit is available for all years of post-secondary education (including graduate studies), and may be claimed for an unlimited number of years. IRS IRM 21.6.3 Credits

The student does not need to be pursuing a program leading to a degree or other recognized education credential if the course(s) is taken to acquire or improve job skills. IRS IRM 4.19.15 Discretionary Programs IRS IRM 4.19.15 Discretionary Programs

This makes the LLC particularly valuable for:

  • Professional development courses
  • Continuing education requirements for licensed professionals
  • Skills enhancement training
  • Graduate-level education

The IRC specifically states that qualified tuition and related expenses shall include expenses described in subsection (f)(1) with respect to any course of instruction at an eligible educational institution to acquire or improve job skills of the individual. IRC § 25A(c)

Credit Amount and Calculation

The Lifetime Learning Credit provides:

20% of the first $10,000 of out-of-pocket expenses for all eligible students in the family. IRS IRM 21.6.3 Credits

This means:

Unlike the American Opportunity Credit which is calculated per student, the LLC has a single limit for the entire tax return, regardless of how many students you’re claiming.

Income Limitations

The credit is subject to income limitations:

The amount of your credit is gradually reduced (phased out) if your MAGI is between $80,000 and $90,000 ($160,000 and $180,000 if you file a joint return). You cannot claim a credit if your MAGI is $90,000 or more ($180,000 or more if you file a joint return). IRS – Instruction 8863: Instructions for Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)

Qualifying Expenses

For continuing education courses, qualifying expenses include:

Qualified education expenses, such as tuition and certain related expenses required for enrollment in a course at an eligible educational institution. IRS IRM 21.6.3 Credits

For the Lifetime learning credit: Qualified education expenses include amounts paid for books, supplies, and equipment only if required to be paid to the institution as a condition of enrollment or attendance. IRS – Instruction 8863: Instructions for Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)

Qualified education expenses include nonacademic fees, such as student activity fees, athletic fees, or other expenses unrelated to the academic course of instruction, only if the fee must be paid to the institution as a condition of enrollment or attendance. IRS – Instruction 8863: Instructions for Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)

It’s important to note that unlike the American Opportunity Credit, the LLC has more restrictive rules about course materials – they must be required and paid directly to the educational institution to qualify.

No Course Load Requirement

One of the advantages of the Lifetime Learning Credit for continuing education is that it has no course-load requirement. IRS IRM 21.6.3 Credits This means you can take just one class and still qualify for the credit, making it ideal for working professionals who are taking courses part-time.

Documentation Requirements

To claim the Lifetime Learning Credit for continuing education courses:

Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), must be submitted. IRS IRM 21.6.3 Credits

To be eligible to claim the lifetime learning credit, the law requires a taxpayer (or a dependent) to have received Form 1098-T, Tuition Statement, from an eligible educational institution, whether domestic or foreign. However, you may claim the credit if the student doesn’t receive a Form 1098-T because the student’s educational institution isn’t required to furnish a Form 1098-T to the student under existing rules (for example, if the student is a qualified nonresident alien, has qualified education expenses paid entirely with scholarships, has qualified education expenses paid under a formal billing arrangement, or is enrolled in courses for which no academic credit is awarded). If a student’s educational institution isn’t required to provide a Form 1098-T to the student, you may claim the credit without a Form 1098-T if you otherwise qualify, can demonstrate that you (or a dependent) were enrolled at an eligible educational institution, and can substantiate the payment of qualified tuition and related expenses. IRS – Publication 970: Tax Benefits for Education

Examples of Qualifying Continuing Education

The Lifetime Learning Credit can be used for various types of continuing education, including:

  • Professional licensing requirements: Courses required to maintain professional licenses (such as for CPAs, attorneys, teachers, or healthcare professionals)
  • Career advancement courses: Classes taken to improve skills in your current field
  • Graduate-level education: The Lifetime Learning Credit is available beyond the first two years of post-secondary education. Box 9 assists the Service in monitoring compliance with respect to a student’s eligibility for the Hope Scholarship Credit or the Lifetime Learning Credit. If Box 9 is checked, the Service is alerted to the fact that the Hope Scholarship Credit is not allowable for the student’s qualified expenses because the student is beyond the first two years of post-secondary education and that the Lifetime Learning Credit may be allowable. Notice 2006-72
  • Professional certification programs: Courses leading to professional certifications
  • Continuing professional education: Qualifying continuing education programs include correspondence or individual study programs that are conducted by continuing education providers and completed on an individual basis by the enrolled individual. The allowable credit hours for such programs will be measured on a basis comparable to the measurement of a seminar or course for credit in an accredited educational institution. Treas. Circular 230 § 10.6 Term and renewal of status as an enrolled

Limitations and Considerations

  • Non-refundable credit: The Lifetime Learning Credit is a non-refundable credit limited to the amount of tax liability. IRS IRM 4.19.15 Discretionary Programs This means it can reduce your tax to zero but won’t result in a refund beyond that.
  • One credit per student: A taxpayer can elect, for any year, only one of the education credits for each student. IRS IRM 21.6.3 Credits You cannot claim both the American Opportunity Credit and the Lifetime Learning Credit for the same student in the same tax year.
  • Coordination with other education benefits: You’ll need to coordinate this credit with other education benefits like tax-free scholarships or distributions from education savings accounts.
  • Filing status restriction: If the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year. IRC § 25A(g) This means married individuals must file jointly to claim the credit.

Conclusion

The Lifetime Learning Credit is an excellent tax benefit for continuing education courses, particularly for professionals seeking to enhance their skills or maintain professional credentials. With its flexibility regarding course load, degree requirements, and unlimited years of eligibility, it provides valuable tax relief for lifelong learners and those investing in their professional development.

To maximize your benefit, keep detailed records of all qualified education expenses, ensure your courses are taken at eligible educational institutions, and coordinate this credit with any other education benefits you might be claiming.

Sources:

  • IRS Internal Revenue Manual
  • IRS Publications and Notices
  • Internal Revenue Code
  • Treasury Regulations

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