Lifetime Learning Credit in California
The Lifetime Learning Credit is a federal tax credit worth up to $2,000 per tax return for qualified tuition and fees paid to eligible educational institutions. Unlike the American Opportunity Credit, it is not limited to the first four years of higher education and is available for undergraduate, graduate, and professional degree courses, as well as courses taken to acquire or improve job skills.
For tax year 2025, the credit equals 20 percent of the first $10,000 in qualified education expenses. The filer's modified adjusted gross income must be below $90,000 (single) or $180,000 (married filing jointly) to receive any credit, and the credit is nonrefundable, meaning it can reduce federal tax liability to zero but will not generate a refund on its own.
California does not offer a state-level equivalent to the Lifetime Learning Credit, so the benefit is entirely federal for California residents. Graduate students at UC Berkeley, UCLA, or other California institutions, as well as working professionals taking continuing education courses, should gather Form 1098-T and confirm that expenses paid with tax-free scholarships or employer-provided educational assistance are excluded from the qualifying amount before claiming the credit.