Education Tax Benefits

Take advantage of tax benefits for money you spend on education. Both the federal government and the state of Maine offer tax credits and deductions.

American Opportunity Tax Credit

This federal tax credit is up to $2,500 per student. It is available for the first four years of postsecondary education. To receive it, you must show you paid for qualified education expenses. There is a maximum income limit for this tax credit.

Lifetime Learning Credit

You may be able to claim up to $2,000 for qualified education expenses on your federal tax return with this credit. The number of years you can claim this credit is unlimited for eligible students.

A parent or student can only claim the American Opportunity Tax Credit OR the Lifetime Learning Credit for the same student.

Opportunity Maine

If you earned an associate or bachelor’s degree at an eligible Maine postsecondary school – and continued to live and work in Maine after graduation – you may be eligible for an Educational Opportunity Tax Credit on your Maine income tax return. Tax credits are based on the amount of student loan payments that you have made during the year.

The tax credit is also available to Maine businesses that make their employees’ educational loan payments.

Learn more:

Educational Opportunity Tax Credit (Opportunity Maine)

Credit for Educational Opportunity Worksheet

Student Loan Interest Deduction

You may be able to deduct interest you paid on a qualified student loan, reducing your federal taxable income up to $2,500. This deduction has an income limit. This deduction may be taken even if the taxpayer does not itemize.

Tuition and Fees Deduction

You or your parents may be able to deduct qualified education expenses on your federal tax return. This may reduce taxable income up to $4,000.

Determining which credits and deductions you may qualify for can be challenging. Ask an expert if you need help. For additional information on federal tax credits and deductions, visit:

Tax Benefits for Education

Publication 970 – Tax Benefits for Education


This information is not intended as individual tax advice to any person and is provided as general information in connection with FAME’s mission to provide financial education to Maine citizens. Please seek professional advice based on your particular circumstances from an independent tax advisor.