What is a lifetime learning credit?

A lifetime learning credit is a reduction of one's taxes owed for qualified tuition and related expenses. The credit can help pay for undergraduate, graduate and professional degree courses as well as courses to improve job skills. The maximum credit allowed per year is $2,000 as of 2014.

The lifetime learning credit is 20 percent of the first $10,000 of qualified expenses up to a maximum of $2,000 per taxpayer. There is no limit on the number of years the LLC can be claimed. To be eligible, the student must be oneself, one's spouse or dependent listed on the tax return. In addition, the tuition expenses must be at an eligible educational institution.