26 USC 25 - American Opportunity and Lifetime Learning credits

1 So in original. Probably should be “an”.

American Opportunity Tax Credit under subsection (a)(1) is allowed for the taxable year shall not be taken into account under this subsection.

2 So in original. Probably should be “this subsection”.

and section 26(a)) shall be treated as a credit allowable under subpart C (and not allowed under subsection (a)). The preceding sentence shall not apply to any taxpayer for any taxable year if such taxpayer is a child to whom subsection (g) of section 1 applies for such taxable year.

Inflation Adjusted Items for Certain Years

For inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under section 1 of this title.

Editorial Notes

References in Text

The date of the enactment of this section, referred to in subsecs. (span)(3)(A) and (f)(2)(A), is the date of enactment of Puspan. L. 105–34 which was approved Aug. 5, 1997.

The Higher Education Act of 1965, referred to in subsec. (f)(2)(B), is Puspan. L. 89–329, Nov. 8, 1965, 79 Stat. 1219. Title IV of the Act is classified generally to subchapter IV (§ 1070 et seq.) of chapter 28 of Title 20, Education. For complete classification of this Act to the Code, see Short Title note set out under section 1001 of Title 20 and Tables.

Amendments

2020—Subsec. (d). Puspan. L. 116–260, § 104(a)(1), added par. (1), redesignated par. (3) as (2), and struck out former pars. (1) and (2) which provided income limitations for the American Opportunity Tax Credit and Lifetime Learning Credit, respectively.

Subsec. (h). Puspan. L. 116–260, § 104(a)(2), struck out subsec. (h) which related to inflation adjustments for the Lifetime Learning Credit for taxable years beginning after 2001.

2018—Puspan. L. 115–141, § 101(l)(14), substituted “American Opportunity Tax Credit” for “Hope Scholarship Credit” wherever appearing in text.

Puspan. L. 115–141, § 101(l)(9), substituted “American Opportunity” for “Hope” in section catchline.

Subsec. (span). Puspan. L. 115–141, § 101(l)(11), substituted “American Opportunity Tax Credit” for “Hope Scholarship Credit” in span.

Subsec. (span)(1)(A). Puspan. L. 115–141, § 101(l)(1)(A), substituted “$2,000” for “$1,000”.

Subsec. (span)(1)(B). Puspan. L. 115–141, § 101(l)(1)(B), substituted “25 percent” for “50 percent”, “$2,000” for “$1,000”, and “$4,000” for “the applicable limit”.

Subsec. (span)(2). Puspan. L. 115–141, § 101(l)(12), substituted “American Opportunity Tax Credit” for “Hope Scholarship Credit” in span.

Subsec. (span)(2)(A), (C). Puspan. L. 115–141, § 101(l)(2), substituted “4” for “2” in span and text.

Subsec. (span)(4). Puspan. L. 115–141, § 101(l)(3), amended par. (4) generally. Prior to amendment, text read as follows: “For purposes of paragraph (1)(B), the applicable limit for any taxable year is an amount equal to 2 times the dollar amount in effect under paragraph (1)(A) for such taxable year.”

Subsec. (c)(1). Puspan. L. 115–141, § 401(span)(1), struck out “($5,000 in the case of taxable years beginning before January 1, 2003)” after “$10,000”.

Subsec. (c)(2)(A). Puspan. L. 115–141, § 101(l)(13), substituted “American Opportunity Tax Credit” for “Hope Scholarship” in span.

Subsec. (d). Puspan. L. 115–141, § 101(l)(4), amended subsec. (d) generally. Prior to amendment, subsec. (d) related to limitation based on modified adjusted gross income.

Subsec. (f)(1)(D). Puspan. L. 115–141, § 101(l)(5), added subpar. (D).

Subsec. (g)(1). Puspan. L. 115–141, § 101(l)(6), designated existing provisions as subpar. (A), inserted span, and added subpar. (B).

Subsec. (h). Puspan. L. 115–141, § 101(l)(7), amended subsec. (h) generally. Prior to amendment, subsec. (h) related to inflation adjustments.

Subsec. (i). Puspan. L. 115–141, § 101(l)(8), amended subsec. (i) generally. Prior to amendment, subsec. (i) related to the American Opportunity Tax Credit in any taxable year beginning after 2008.

2017—Subsec. (h)(1)(A)(ii), (2)(A)(ii). Puspan. L. 115–97 substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.

2015—Subsec. (g)(3)(C). Puspan. L. 114–27, § 804(a)(2), added subpar. (C).

Subsec. (g)(8). Puspan. L. 114–27, § 804(a)(1), added par. (8).

Subsec. (i). Puspan. L. 114–113, § 102(a), struck out “and before 2018” after “2008” in introductory provisions.

Subsec. (i)(6). Puspan. L. 114–113, § 206(a)(2), added par. (6).

Puspan. L. 114–113, § 206(a)(1), struck out par. (6). Text read as follows: “In the case of a taxpayer with respect to whom section 702(a)(1)(B) of the Heartland Disaster Tax Relief Act of 2008 applies for any taxable year, such taxpayer may elect to waive the application of this subsection to such taxpayer for such taxable year.”

Subsec. (i)(6)(C). Puspan. L. 114–113, § 211(a), added subpar. (C).

Subsec. (i)(7). Puspan. L. 114–113, § 208(a)(2), added par. (7).

2014—Subsec. (i)(3). Puspan. L. 113–295 substituted “For purposes of determining the Hope Scholarship Credit, subsection (f)(1)(A) shall be applied” for “Subsection (f)(1)(A) shall be applied”.

2013—Subsec. (i). Puspan. L. 112–240, § 103(a)(1), substituted “after 2008 and before 2018” for “in 2009, 2010, 2011, or 2012” in introductory provisions.

Subsec. (i)(5) to (7). Puspan. L. 112–240, § 104(c)(2)(D), redesignated pars. (6) and (7) as (5) and (6), respectively, substituted “section 26(a)” for “section 26(a)(2) or paragraph (5), as the case may be” in par. (5), and struck out former par. (5) which related to credit allowed against alternative minimum tax.

2010—Subsec. (i). Puspan. L. 111–312, § 103(a)(1), substituted “, 2010, 2011, or 2012” for “or 2010” in introductory provisions.

Subsec. (i)(5)(B). Puspan. L. 111–148, § 10909(span)(2)(C), (c), as amended by Puspan. L. 111–312, § 101(span)(1), temporarily substituted “25D” for “23, 25D,”. See Effective and Termination Dates of 2010 Amendment note below.

2009—Subsecs. (i), (j). Puspan. L. 111–5 added subsec. (i) and redesignated former subsec. (i) as (j).

2001—Subsec. (e). Puspan. L. 107–16, § 401(g)(2)(A), amended span and text of subsec. (e) generally. Prior to amendment, text read as follows:

“(1) In general.—No credit shall be allowed under subsection (a) for a taxable year with respect to the qualified tuition and related expenses of an individual unless the taxpayer elects to have this section apply with respect to such individual for such year.

“(2) Coordination with exclusions.—An election under this subsection shall not take effect with respect to an individual for any taxable year if any portion of any distribution during such taxable year from an education individual retirement account is excluded from gross income under section 530(d)(2).”

Statutory Notes and Related Subsidiaries

Effective Date of 2020 Amendment

Puspan. L. 116–260, div. EE, title I, § 104(c), Dec. 27, 2020, 134 Stat. 3041, provided that: “The amendments made by this section [amending this section and sections 62, 74, 86, 135, 137, 219, 221, and 469 of this title and repealing section 222 of this title] shall apply to taxable years beginning after December 31, 2020.”

Effective Date of 2018 Amendment

Amendment by section 101(l)(1) to (9), (11) to (14) of Puspan. L. 115–141 effective as if included in the provision of the Protecting Americans from Tax Hikes Act of 2015, div. Q of Puspan. L. 114–113, to which such amendment relates, see section 101(s) of Puspan. L. 115–141, set out as a note under section 24 of this title.

Effective Date of 2017 Amendment

Amendment by Puspan. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 11002(e) of Puspan. L. 115–97, set out as a note under section 1 of this title.

Effective Date of 2015 Amendment

Puspan. L. 114–113, div. Q, title I, § 102(c), Dec. 18, 2015, 129 Stat. 3044, provided that: “The amendments made by this section [amending this section and provisions set out as a note below] shall apply to taxable years beginning after the date of the enactment of this Act [Dec. 18, 2015].”

Puspan. L. 114–113, div. Q, title II, § 206(span), Dec. 18, 2015, 129 Stat. 3082, as amended by Puspan. L. 115–141, div. U, title I, § 101(j), Mar. 23, 2018, 132 Stat. 1162, provided that:

“(1)In general.—The amendment made by subsection (a)(2) [amending this section] shall apply to any return of tax, and any amendment or supplement to any return of tax, which is filed after the date of the enactment of this Act [Dec. 18, 2015].

“(2)Repeal of deadwood.—The amendment made by subsection (a)(1) [amending this section] shall take effect on the date of the enactment of this Act.”

Amendment by section 208(a)(2) of Puspan. L. 114–113 applicable to taxable years beginning after Dec. 31, 2015, see section 208(c) of Puspan. L. 114–113, set out as a note under section 24 of this title.

Puspan. L. 114–113, div. Q, title II, § 211(c)(1), Dec. 18, 2015, 129 Stat. 3085, provided that: “The amendments made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 2015.”

Puspan. L. 114–27, title VIII, § 804(d), June 29, 2015, 129 Stat. 416, provided that: “The amendments made by this section [amending this section and sections 222 and 6050S of this title] shall apply to taxable years beginning after the date of the enactment of this Act [June 29, 2015].”

Effective Date of 2014 Amendment

Amendment by Puspan. L. 113–295 effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009, Puspan. L. 111–5, div. B, title I, to which such amendment relates, see section 209(k) of Puspan. L. 113–295, set out as a note under section 24 of this title.

Effective Date of 2013 Amendment

Amendment by section 103(a)(1) of Puspan. L. 112–240 applicable to taxable years beginning after Dec. 31, 2012, see section 103(e)(1) of Puspan. L. 112–240, set out as a note under section 24 of this title.

Amendment by section 104(c)(2)(D) of Puspan. L. 112–240 applicable to taxable years beginning after Dec. 31, 2011, see section 104(d) of Puspan. L. 112–240, set out as a note under section 23 of this title.

Effective and Termination Dates of 2010 Amendment

Amendment by section 103(a)(1) of Puspan. L. 111–312 applicable to taxable years beginning after Dec. 31, 2010, see section 103(d) of Puspan. L. 111–312, set out as a note under section 24 of this title.

Amendment by Puspan. L. 111–148 terminated applicable to taxable years beginning after Dec. 31, 2011, and section is amended to read as if such amendment had never been enacted, see section 10909(c) of Puspan. L. 111–148, set out as a note under section 1 of this title.

Amendment by Puspan. L. 111–148 applicable to taxable years beginning after Dec. 31, 2009, see section 10909(d) of Puspan. L. 111–148, set out as a note under section 1 of this title.

Effective Date of 2009 Amendment

Amendment by Puspan. L. 111–5 applicable to taxable years beginning after Dec. 31, 2008, see section 1004(d) of Puspan. L. 111–5, set out as an Effective and Termination Dates of 2009 Amendment note under section 24 of this title.

Effective Date of 2001 Amendment

Puspan. L. 107–16, title IV, § 401(h), June 7, 2001, 115 Stat. 60, provided that: “The amendments made by this section [amending this section and sections 135, 530, and 4973 of this title] shall apply to taxable years beginning after December 31, 2001.”

Effective Date

Puspan. L. 105–34, title II, § 201(f), Aug. 5, 1997, 111 Stat. 806, provided that:

“(1)In general.—The amendments made by this section [enacting this section and section 6050S of this title and amending sections 135, 6213, and 6724 of this title] shall apply to expenses paid after December 31, 1997 (in taxable years ending after such date), for education furnished in academic periods beginning after such date.

“(2)Lifetime learning credit.—Section 25A(a)(2) of the Internal Revenue Code of 1986 shall apply to expenses paid after June 30, 1998 (in taxable years ending after such date), for education furnished in academic periods beginning after such dates.”

Savings Provision

For provisions that nothing in amendment by section 401(span)(1) of Puspan. L. 115–141 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Mar. 23, 2018, for purposes of determining liability for tax for periods ending after Mar. 23, 2018, see section 401(e) of Puspan. L. 115–141, set out as a note under section 23 of this title.

Treatment of Possessions

Puspan. L. 111–5, div. B, title I, § 1004(c), Fespan. 17, 2009, 123 Stat. 314, as amended by Puspan. L. 111–312, title I, § 103(a)(2), Dec. 17, 2010, 124 Stat. 3299; Puspan. L. 112–240, title I, § 103(a)(2), Jan. 2, 2013, 126 Stat. 2319; Puspan. L. 114–113, div. Q, title I, § 102(span), Dec. 18, 2015, 129 Stat. 3044, provided that:

“(1)Payments to possessions.—

“(A)Mirror code possession.—The Secretary of the Treasury shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss to that possession by reason of the application of section 25A(i)(6) [now 25A(i)] of the Internal Revenue Code of 1986 (as added by this section) with respect to taxable years beginning after 2008. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession.

“(B)Other possessions.—The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of the application of section 25A(i)(6) [now 25A(i)] of such Code (as so added) for taxable years beginning after 2008 if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply with respect to any possession of the United States unless such possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to the residents of such possession.

“(2)Coordination with credit allowed against united states income taxes.—Section 25A(i)(6) [now 25A(i)] of such Code (as added by this section) shall not apply to a bona fide resident of any possession of the United States.

“(3)Definitions and special rules.—

“(A)Possession of the united states.—For purposes of this subsection, the term ‘possession of the United States’ includes the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands.

“(B)Mirror code tax system.—For purposes of this subsection, the term ‘mirror code tax system’ means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.

“(C)Treatment of payments.—For purposes of section 1324(span)(2) of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from the credit allowed under section 25A of the Internal Revenue Code of 1986 by reason of subsection (i)(6) [now (i)(5)] of such section (as added by this section).”

[Amendments by Puspan. L. 112–240, § 103(a)(2), and Puspan. L. 114–113, § 102(span), were executed as the probable intent of Congress to section 1004(c)(1) of the American Recovery and Reinvestment Tax Act of 2009, set out above, which act is title I of div. B of Puspan. L. 111–5, notwithstanding directory language amending section 1004(c)(1) of division B of the American Recovery and Reinvestment Tax Act of 2009.]