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Two tax credits are available to persons who pay expenses for higher (postsecondary) education:

• Lifetime Learning Credit

• American Opportunity Credit

	American Opportunity Credit	Lifetime Learning Credit
Maximum credit	$2,500 credit per eligible student	$2,000 credit per return
MAGI limit	Credit phase-out begins if MAGI is over $160,000 MFJ and $80,000 S, HH, or QSS No credit if MAGI is $180,000 or more MFJ and $90,000 or more S, HH, or $138,000) and married couples filing QSS
Refundable or nonrefundable	40% refundable	Nonrefundable credit limited to tax liability
Availability	Available ONLY for first 4 years	Available ALL years AND for courses to acquire or improve job skills
Number of tax years credit available	Available ONLY for 4 tax years per eligible student	Available for an UNLIMITED number of years
Type of degree required	Student must be pursuing an undergraduate degree or other recognized education credential	Student does not need to be pursuing a degree or other recognized education credential
Number of courses	Student enrolled at least half-time for at least one academic period beginning in the tax year	Available for one or more courses
Felony drug conviction	No felony drug convictions on student’s records	Felony drug convictions permitted
Qualified expenses	Books, supplies, and equipment do not need to be purchased from the institution in order to qualify	Tuition and required enrollment fees, including required amounts paid to the institution for course-related books, supplies, and equipment

Rules	Roth IRA	Traditional IRA
2023 Contribution Limits	$6,500; $7,500 if age 50 or older.	$6,500; $7,500 if age 50 or older.
2023 Income Limits	Single tax filers with MAGIs of less than $153,000 (phaseout begins at $138,000) and married couples filing jointly with MAGIs of less than $228,000 (phaseout begins at $218,000) are eligible.	Anyone with earned income can contribute, but tax deductibility is based on income limits and participation in an employer plan.
Age Limits	No age limitations on contributions.	No age limitations on contributions.
Tax Treatment	No tax deductions for contributions; tax-free earnings and withdrawals in retirement.	Tax deduction in contribution year; ordinary income taxes owed on withdrawals.
Withdrawal Rules	Contributions can be withdrawn at any time during the tax year, tax-free and penalty-free. Five years after your first contribution and age 59½, earnings withdrawals are tax-free, too.	Withdrawals are penalty-free beginning at age 59½.
Required Minimum Distribution	None for the account owner. Account beneficiaries are subject to the RMD rules.	Distributions must begin at age 73 for account owners born between 1951 and 1959 and 75 for those born in 1960 or later. Beneficiaries are also subject to the RMD rules.

Taxpayers that make qualified energy-efficient improvements to their home after January 1, 2023, may qualify for a credit of up to $3,200.

The credit is allowed for qualifying property placed in service on or after January 1, 2023, and before January 1, 2033.

The maximum credit taxpayers can claim each year is:

1. $1,200 for energy property costs and certain energy-efficient home improvements, with limits on doors ($250 per door and $500 total), windows and skylights ($600 total), and home energy audits ($150)
2. $2,000 per year for qualified heat pumps, biomass stoves, or biomass boilers

Taxpayers that invest in renewable energy for their home may qualify for an annual residential clean energy tax credit. The Residential Clean Energy Credit equals 30% of the costs of new, qualified clean energy property for the taxpayer's home installed anytime from 2022 through 2033.

Qualified expenses include the costs of new clean energy property including:

1. Solar electric panels
2. Solar water heaters
3. Wind turbines
4. Geothermal heat pumps
5. Fuel cells
6. Battery storage technology (beginning in 2023)
7. Qualified expenses may include labor costs for onsite preparation, assembly, or original installation of the property and for piping or wiring to connect it to the home

The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles purchased from 2023 to 2032. Taxpayers that place in service a new plug-in electric vehicle (EV) or fuel cell vehicle (FCV) in 2023 or after, may qualify for a new clean vehicle credit.

Taxpayers may qualify for a credit of up to $7,500 if they buy a new, qualified plug-in EV or FCV. The credit is nonrefundable and taxpayers can not apply any excess credit to future tax years

Taxpayers may qualify for a credit for buying a previously owned qualified plug-in electric vehicle (EV) or fuel cell vehicle (FCV), including cars and light trucks. Beginning January 1, 2023, taxpayers that buy a qualified used EV or FCV from a licensed dealer for $25,000 or less, may be eligible for a used clean vehicle credit (also referred to as a previously owned clean vehicle credit).

The credit equals 30% of the sale price up to a maximum credit of $4,000. The credit is nonrefundable and taxpayers can not apply any excess credit to future tax years.