2025 Form 1040, Line 29
Education Credits: AOTC and LLC on Line 29
Line 29 carries the §25A education credits: the American opportunity credit pays up to $2,500 per eligible student with 40% refundable, while the lifetime learning credit pays up to $2,000 per return and never refunds. Both are claimed on Form 8863.
AOTC: $2,500 per student, partly refundable
The §25A(b) American opportunity credit covers the first four years of postsecondary education for half-time-or-better students: tuition, fees, and course materials count. Forty percent of the credit — up to $1,000 — is refundable, so it can pay out past zero into your refund.
LLC: $2,000 per return for longer horizons
The §25A(c) lifetime learning credit fits graduate school, professional courses, and skill upgrades: no four-year limit, no half-time rule, but a $2,000 ceiling per return rather than per student, and the whole credit is nonrefundable. One credit per student per year — never both for the same student.
Form 8863 and the 1098-T gate
Form 8863 computes whichever credit each student takes, and the school must generally furnish a 1098-T showing qualifying expenses before you may claim a dollar. No 1098-T, no credit, with only narrow statutory exceptions. For how credits stack against tax and payments, see chapter 4 of the Guide.
Questions, answered
- Can I claim both the AOTC and the LLC?
- Not for the same student in the same year — pick one credit per student. Different students on the same return can use different credits.
- Is the AOTC refundable?
- Partly: 40% of the credit, up to $1,000, is refundable. The rest only offsets tax, and the LLC is entirely nonrefundable.
- Do I need a 1098-T to claim an education credit?
- Generally yes — the school must furnish a 1098-T showing qualifying expenses, with only narrow statutory exceptions.
Keep reading: Child Tax Credit · Earned Income Credit · Schedule 3