Lifetime Learning Credit

None of the Lifetime Learning credit is refundable. 40% of the American Opportunity Credit may be refundable and the balance is nonrefundable.

A $2,000 credit is available for qualified expenses paid for post-secondary degree programs or for a non-degree program to acquire or improve job skills.
It is not limited to the first 4 years of postsecondary education.
Qualified expenses include tuition, course related books, activity fees and any equipment that must be purchased from the educational institution as a condition of enrollment. Room & Board expenses do not qualify.
The modified adjusted gross income threshold at which the lifetime learning credit phase out is $107,000- $127,000 for joint filers, up from $104,000-$124,000, and $53,000-$63,000 for singles and heads of household, up from $52,000-$62,000.

Any unused Lifetime Learning credit cannot be carried forward to future years.
The phase out for:
married taxpayers is Adjusted Gross Income between $107,000-$127,000. ($104,000-$124,000 in 2012).
single, head of household or qualifying widower(s) filing status taxpayers phase out is between $53,000 and $63,000.
Married filing separately status are not allowed a Lifetime Learning credit.

You cannot claim the Lifetime Learning Credit and the American Opportunity credit in the same year for the same student. You may claim each of the credits for a different student in your family.

Qualified educational expenses would include tuition and required fees, but would Not include room and board, insurance, transportation or other personal living or family expenses, medical expenses, supplies or equipment.
The credits are subject to income limitations. The credits are not available for married filing separate returns.
Both credits are claimed on IRS Form 8863.