Question

The lifetime learning credit is equal to (1)% of eligible expenses up to an annual maximum of (2) of eligible expenses in one year.

a) 20%, $2,000
b) 10%, $5,000
c) 50%, $1,000
d) 30%, $3,000

Answer 1

The lifetime learning credit is equal to 30% of eligible expenses up to an annual maximum of $3,000.

Step-by-step explanation:

The correct answer is d) 30%, $3,000

The lifetime learning credit is a tax credit that helps students and their families offset the cost of higher education expenses. It is equal to 20% of eligible expenses up to an annual maximum of $10,000.

For example, if a student has $8,000 of eligible expenses in one year, they would be eligible for a lifetime learning credit of $1,600 (20% of $8,000). However, if the student has $12,000 of eligible expenses, the maximum credit they would be eligible for is $3,000 (20% of $10,000).