The Internal Revenue Service is reminding parents and students that now is a good time to see if they will qualify for college tax credits when they file their 2015 federal income tax returns.

In general, the American Opportunity Tax Credit or Lifetime Learning Credit is available to taxpayers who pay qualifying expenses for an eligible student. Eligible students include the taxpayer, spouse and dependents. The American Opportunity Tax Credit provides a credit for each eligible student, while the Lifetime Learning Credit provides a maximum credit per tax return.

The IRS estimates in tax year 2013 almost 110,000 Kansas taxpayers claimed education credits worth more than $95 million in tax savings. Nationally, almost 13 million taxpayers claimed the credits that helped offset higher education costs by more than $9 billion.

Other key points:

·        A taxpayer often qualifies for both of these credits, but the rules say that only one can be claimed for a particular student in a particular year. 

·        You must file Form 1040A or Form 1040 and complete Form 8863, Education Credits, to claim these credits on your tax return.

·        The credits apply to eligible students enrolled in an eligible college, university or vocational school, including both nonprofit and for-profit institutions.

·        The credits are subject to income limits that could reduce the amount claimed on their tax return.

“Many of those eligible for the American Opportunity Tax Credit qualify for the maximum annual credit of $2,500 per student for the cost of tuition, fees and course materials paid during the tax year, said IRS Spokesman Michael Devine. ”Also, up to $1,000 is refundable, which means you can get the credit even if you owe no tax.”

The Lifetime Learning Credit of up to $2,000 per tax return is available for both graduate and undergraduate students. Unlike the American Opportunity Tax Credit, the limit on the Lifetime Learning Credit applies to each tax return, rather than to each student. Also, the Lifetime Learning Credit does not provide a benefit to people who owe no tax.

To help determine eligibility for these benefits and for complete details on all of the tax benefits for education, visit the Education Credits Web page or use the IRS’s Interactive Tax Assistant tool. Both are available on IRS.gov.