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How do the education tax credits differ, and can I claim one every year?

The American Opportunity Tax Credit is for the first four years of undergraduate study, is partly refundable, and is worth more per year, but it can only be claimed for four tax years per student. The Lifetime Learning Credit has no year limit, covers graduate school and job-skill courses, and is nonrefundable, but is generally smaller and phases out at lower income. You cannot claim both for the same student in the same year, though you can use different credits for different students. Both phase out based on modified adjusted gross income at levels the IRS sets, and you generally cannot double-dip with tax-free 529 withdrawals for the same expenses. Keep Form 1098-T from the school to substantiate your claim.

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