Education Tax Benefits
Opportunity Maine provides a Maine income tax credit for student loan payments made by degree earners who live, work and pay taxes in Maine following graduation. The tax credit is also available to Maine businesses that make their employees’ educational loan payments.
The Hope Scholarship(known as the American Opportunity Tax Credit for 2009 and 2010) provides a federal income tax credit of up to $2,500 per student based on the first $4,000 in tuition, fees and course materials paid by the taxpayer during the tax year. The tax credit is 100% of the first $2,000 and 25% of the second $2,000 (40% refundable). The tax credit is limited to the first four years of post secondary education.
Lifetime Learning Tax Credit provides a federal income tax credit of up to $2,000 per taxpayer based on the first $10,000 in tuition and fees paid by the taxpayer during the tax year. The Lifetime Learning Tax Credit may be received for an unlimited number of years.
The Student Loan Interest Deduction allows borrowers of federal and private education loans to deduct up to $2,500 in interest as an adjustment to income. This deduction may be taken even if the taxpayer does not itemize.
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