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Who Can't Claim the Credit? You can't claim the lifetime learning credit for 2022 if any of the following apply. • Your filing status is married filing separately. • You are listed as a dependent on another person's tax return (such as your parents'). See Who Can Claim a Dependent's Expenses, later. • Your modified adjusted gross income (MAGI) is $90,000 or more ($180,000 or more if filing married fil- ing jointly). MAGI is explained later under Effect of the Amount of Your Income on the Amount of Your Credit. • You (or your spouse) were a nonresident alien for any part of 2022 and the nonresident alien didn't elect to be treated as a resident alien for tax purposes. More information on nonresident aliens can be found in Pub. 519. • You claim the American opportunity credit (see chap- ter 2) for the same student in 2022. What Expenses Qualify? The lifetime learning credit is based on qualified education expenses you pay for yourself, your spouse, or a depend- ent you claim on your tax return. Generally, the credit is al- lowed for qualified education expenses paid in 2022 for an academic period beginning in 2022 or in the first 3 months of 2023. For example, if you paid $1,500 in December 2022 for qualified tuition for the spring 2023 semester beginning in January 2023, you may be able to use that $1,500 in figur- ing your 2022 credit. Academic period. An academic period includes a se- mester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. If an educational institution uses credit hours or clock hours and doesn't have aca- demic terms, each payment period can be treated as an academic period. Paid with borrowed funds. You can claim a lifetime learning credit for qualified education expenses paid with the proceeds of a loan. You use the expenses to figure the lifetime learning credit for the year in which the expenses are paid, not the year in which the loan is repaid. Treat loan disbursements sent directly to the educational institu- tion as paid on the date the institution credits the student's account. Student withdraws from class(es). You can claim a lifetime learning credit for qualified education expenses not refunded when a student withdraws. Qualified Education Expenses For purposes of the lifetime learning credit, qualified edu- cation expenses are tuition and certain related expenses required for enrollment in a course at an eligible educa- tional institution. The course must be either part of a post- secondary degree program or taken by the student to ac- quire or improve job skills. Eligible educational institution. An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to par- ticipate in a student aid program administered by the U.S. Department of Education. It includes virtually all accredi- ted public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. The educational institution should be able to tell you if it is an eligible educational institution. Certain educational institutions located outside the Uni- ted States also participate in the U.S. Department of Edu- cation's Federal Student Aid (FSA) programs. Related expenses. Student activity fees and expenses for course-related books, supplies, and equipment are in- cluded in qualified education expenses only if the fees and expenses must be paid to the institution for enroll- ment or attendance. Prepaid expenses. Qualified education expenses paid in 2022 for an academic period that begins in the first 3 months of 2023 can be used in figuring an education credit for 2022 only. See Academic period, earlier. For ex- ample, if you pay $2,000 in December 2022 for qualified tuition for the 2023 winter quarter that begins in January 2023, you can use that $2,000 in figuring an education credit for 2022 only (if you meet all the other require- ments). You can't use any amount you paid in 2021 or 2023 to figure the qualified education expenses you use to figure your 2022 education credit(s). In the following examples, assume that each student is an eligible student at an eligible educational institution. Example 1. Jackson is a sophomore in University V's degree program in dentistry. This year, in addition to tui- tion, Jackson is required to pay a fee to the university for the rental of the dental equipment that will be used in this program. Because the equipment rental fee must be paid to University V for enrollment and attendance, the equip- ment rental fee is a qualified expense. Example 2. Donna and Charles, both first-year stu- dents at College W, are required to have certain books and other reading materials to use in their mandatory first-year classes. The college has no policy about how students should obtain these materials, but any student who purchases them from College W's bookstore will re- ceive a bill directly from the college. Charles bought the books from a friend, so what was paid for them isn't a qualified education expense. Donna bought the books at College W's bookstore. Although Donna paid College W directly for the first-year books and materials, the payment isn't a qualified expense because the books and materials TIP CAUTION ! Page 24 Chapter 3 Lifetime Learning Credit