2008 EDUCATION TAX CREDIT (FORM 1098-T/LIFETIME LEARNING TAX CREDIT)
Effective July 1998, a graduate student (or the person claiming the student as a dependent) who made out-of-
pocket payments for qualified education expenses may be eligible to claim the Lifetime Learning Tax Credit
when completing the 1040A or 1040 Federal Tax form. IRS Form 8863 is completed to claim the tax credit.
In late January or early February, students are sent Form 1098-T with financial information. This form is sent
to graduate students who may or may not be eligible to claim the Lifetime Learning Tax Credit.
International students on F-1 or J-1 visas who file taxes as nonresident aliens and must complete Federal Tax
Form 1040NR or 1040NR-EZ are not eligible to claim the Lifetime Learning Tax Credit.
The Lifetime Learning Credit is:
* A federal income tax credit for higher education.
* Equivalent to 20% of the first $10,000 paid in “out-of-pocket qualified education expenses," up to a
maximum credit of $2,000 per tax return per tax year.
* Nonrefundable (it is subtracted from the taxes you owe; you cannot claim a credit for more than you owe in
taxes, nor can you file a tax return only to claim this credit).
* Not limited to a particular number of years for which a student can claim the credit.
Which fees are considered “Qualified Education Expenses Paid”:
* The total payments you (or, if a dependent, the taxpayer who claims you as a dependent) made using student
wages (salary), loans, gifts, inheritances, or personal savings to the University for tuition, fees, (excluding
health insurance) and other qualified education expenses (such as Professional Degree Fee, Course
Laboratory and Materials Fee, Summer Session Tuition Fee, etc.).
Website with complete listing of qualified expenses: http://registrar.ucsd.edu/StudentLink/tra_qualfees.html
Who MAY be eligible to claim the Lifetime Learning Tax Credit:
* A graduate student (or the person cla