Reviewed and adapted by Brenda Procter, MS, and Debby Whiston, MS, Consumer and Family Economics, College of Human Environmental Sciences, University of Missouri-Columbia

Are you footing the costs of higher education for yourself or a dependent you claim for an exemption on your tax return? The IRS says that education tax credits can help offset those costs. The Hope Credit and the Lifetime Learning Credit are education credits you may be able to subtract in full from your federal income tax, not just deduct from your taxable income.

The Hope Credit applies only for the first two years of post-secondary education, such as college or vocational school, and it can be worth up to $1,500 per eligible student, per year. It does not apply to graduate and professional-level programs. You’re allowed 100 percent of the first $1,000 of qualified tuition and related fees paid during the tax year, plus 50 percent of the next $1,000. Each student must be enrolled at least half-time for at least one academic period beginning during the year.

The Lifetime Learning Credit applies to undergraduate, graduate and professional degree courses, including instruction to acquire or improve job skills. If you qualify, your credit equals 20 percent of the first $10,000 of post-secondary tuition and fees you pay during the year for all eligible students, for a maximum credit of $2,000 per tax return.

You cannot claim both the Hope and Lifetime Learning Credits for the same student in the same year.

To qualify for either credit, you must pay post-secondary tuition and fees for yourself, your spouse or your dependent. The credit may be claimed by the parent or the student, but not by both. If the student was claimed as a dependent, the student cannot claim the credit.

These credits are phased out for Modified Adjusted Gross Income over $42,000 ($85,000 for married filing jointly) and eliminated completely for Modified AGI of $52,000 or more ($105,000 for married filing jointly). If the taxpayer is married, the credit may be claimed only on a joint return.

The Hope Credit is not allowed for a student with a felony drug offense conviction.

Use Form 8863 to claim either the Hope or Lifetime Learning Credit.

For more information, see Publication 970, Tax Benefits for Education. Download it or order it by calling the IRS, toll free, at 1-800-TAX-FORM (1-800-829-3676).