How Much Can You Save on Education Taxes in 2026?
The federal government offers up to $2,500 per student in education tax credits — but which one applies to your family, and how much of it do you actually keep? This calculator does the math in under two minutes.
Two credits. One right answer for your family.
The tax code provides two education credits that can reduce your federal tax bill dollar-for-dollar — but the rules are different, the income limits don’t match, and you can only claim one per student per year. Getting this wrong means leaving money on the table.
The American Opportunity Tax Credit (AOTC) provides up to $2,500 per eligible undergraduate student, and 40% of it — up to $1,000 — is refundable, meaning you can receive it even if you owe no taxes. Under the One Big Beautiful Bill Act, AOTC eligibility has been expanded to cover the first five years of undergraduate education (previously four).
The Lifetime Learning Credit (LLC) covers a broader range of students — graduate school, professional development, continuing education — at up to $3,000 per tax return. The OBBBA also substantially increased the LLC’s income phase-out thresholds, making it accessible to more families than ever before.
The right answer depends on your income, your student’s year in school, how much you’ve paid in qualified expenses, and whether you’ve already claimed the AOTC in prior years. This calculator accounts for all of it.
Education Tax Credit Calculator
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Coordinate Education Credits With Your Broader Tax Strategy
Education planning intersects with 529 withdrawals, financial aid optimization, and multi-year tax projections. A conversation with our team can help ensure you are capturing every available benefit.
This Education Tax Credit Analysis is prepared by Moran Wealth Management, LLC (“MWM”) for educational and illustrative purposes only. Results are hypothetical and based on information you provide and income parameters established under current federal tax law, including the One Big Beautiful Bill Act (2025). Actual credit amounts may vary based on your specific tax situation, filing status, documentation, and applicable IRS guidance. Tax laws are complex and subject to change. This tool does not constitute tax, legal, or financial advice, and use of this calculator does not establish a client relationship with MWM. We recommend consulting a qualified tax professional before making decisions based on these estimates. Moran Wealth Management, LLC is an SEC-registered investment adviser located in Naples, Florida. For disclosures, visit MoranWM.com/disclosures or contact us at 239-920-4440 or info@moranwm.com.
We integrate proactive tax strategies and risk mitigation into your overall financial picture to help manage your assets and optimize your returns.
Provide your filing status and Modified Adjusted Gross Income (MAGI). These determine your phase-out range for both credits.
For each student, enter their year of study, enrollment status, qualified expenses paid, scholarships received, and any 529 plan distributions used. You can add multiple students.
If you paid interest on qualified student loans in 2026, we'll calculate your above-the-line deduction and estimated tax savings.
The calculator compares your AOTC and LLC amounts side by side, recommends the optimal strategy, and generates a personalized PDF report you can keep for your records.
Who This Calculator Is For
This tool is designed for families with students currently enrolled in college or other post-secondary education who want to understand their federal education tax credit options before filing — or before making decisions about tuition payments, 529 withdrawals, or income timing.
It is particularly useful if:
College Families
You have one or more children in undergraduate or graduate programs
Middle Income
Your household income is between $80,000 and $280,000, where phase-outs may reduce your credit
Credit Confusion
You are unsure whether the AOTC or LLC applies to your student’s situation
529 Coordination
You want to coordinate education credits with 529 plan withdrawals or other tax strategies
Frequent Asked Questions
The AOTC applies only to the first five years of undergraduate education and provides up to $2,500 per student, with a refundable portion. The LLC applies to any post-secondary or professional education and provides up to $3,000 per tax return, but is nonrefundable. You cannot claim both credits for the same student in the same year.
For the AOTC, the phase-out range is $80,000–$90,000 for single filers and $160,000–$180,000 for married filing jointly. For the LLC, the OBBBA expanded the phase-out range to $90,000–$140,000 (single) and $180,000–$280,000 (MFJ) — significantly broader than prior law.
Yes. Qualified expenses must be reduced by tax-free 529 distributions before calculating either credit. This is sometimes called the "no double-dipping" rule. The calculator accounts for this automatically.
Yes, under the One Big Beautiful Bill Act, AOTC eligibility was expanded from four to five years of undergraduate education, effective for 2026.
Qualified expenses generally include tuition, required enrollment fees, and course materials required for enrollment. Room and board, insurance, and transportation do not qualify. Expenses paid with tax-free scholarships or grants must be excluded.
Yes. The above-the-line deduction for qualified student loan interest remains available at up to $2,500, subject to MAGI phase-outs of $85,000–$100,000 (single) and $170,000–$200,000 (MFJ).
Key Features
Accounts for OBBBA changes effective for the 2026 tax year
Handles multiple students on the same return
Automatically reduces expenses for scholarships, grants, and 529 distributions
Calculates the refundable portion of the AOTC
Visualizes income phase-out ranges for both credits
Includes student loan interest deduction estimate
Generates a branded PDF summary you can share with your tax advisor
Why Work with Moran Wealth Management®?
Moran Wealth Management, LLC is an SEC-registered investment adviser based in Naples, Florida. Our team works with families navigating the intersection of education planning, tax optimization, and long-term wealth management. From 529 strategies to coordinating education credits with broader financial plans, we provide personalized guidance designed around your goals.
This calculator is one of several free planning tools available at MoranWM.com. If your results suggest an opportunity worth exploring, we welcome the conversation.