If you’re a college student (or the parent of one), you should know about some key tax breaks that are available to you when you do your taxes. There are two tax credits for higher education. They’re targeted at different types of students, so it pays to know the differences.
American Opportunity Credit
This credit is for students who are earning their undergraduate degrees. The credit is specifically limited to those expenses incurred in the first four years of college. The credit is worth $2,500; the really good news is that $1,000 of that is refundable, meaning you could get that back as a refund even if you don’t owe any taxes. There’s an $80,000 income ceiling for single filers to qualify for the credit ($160,000 if you’re married filing jointly). If income is more than those amounts, the credit starts to decrease. The credit is available through the 2017 tax year.