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Ask Kim

Education Tax Breaks for Online Courses

For you to receive a tax break, the school must be accredited and eligible for federal financial aid.

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Do online college courses qualify for the American Opportunity and Lifetime Learning tax credits, or do only classes taken in person at a brick-and-mortar college qualify? --N.F., Beltsville, Md.

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Whether you take a class online or in person doesn’t matter; what matters is which institution is offering it. “The school must be accredited and eligible for federal financial aid,” says Mark Kantrowitz, publisher of Edvisors.com. Check eligibility at www.fafsa.ed.gov.

To qualify for the American Opportunity Credit, you must also be enrolled at least half-time in a program leading to a degree or other credential and be in the first four years of postsecondary education. And your income cannot exceed certain limits: in 2015, a modified adjusted gross income of less than $90,000 if you’re single or $180,000 if you’re married filing jointly. For the Lifetime Learning Credit, there’s no requirement that you attend school half-time, but your MAGI must be less than $65,000 if you’re single or $130,000 if you’re married filing jointly.

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