Students and graduates can save a significant amount of money at tax time by utilizing one of the following education credits.

American Opportunity Credit

You can claim up to $2,500 per student to account for tuition, activity fees, books, equipment and supplies, provided the student in within their first four years of college. Requirements state that the eligible student has to be enrolled at least half time, and can’t have any felony drug convictions. Parents are able to claim the credit for an eligible student, as long as they claim the student as a dependent on their tax return. The American Opportunity Credit is subject to an income phase-out, capping at $90,000 annually for single filers, and $180,000 for joint taxpayers.

Lifetime Learning Credit

This credit is worth up to $2,000 for the same expenses as the previous credit, however the credit extends to graduate and non-degreed courses at accredited learning institutions. That means you aren’t required to be an undergraduate, and can be at any point in your post-secondary education. Different from the American Opportunity Credit, this credit has no requirements for enrollment time, and is limited to one per return. The maximum credit amount is $2,000 no matter how many students are eligible on your return. The Lifetime Learning Credit also phases out at certain income levels: single filers limited to modified adjusted gross income of $65,000, $131,000 for joint filers.

You are only able to claim one of the credits, so if you opt for the Lifetime Learning Credit, you can’t claim the American Opportunity Credit, or the other way around.