Question about the lifetime learning credit:
For anyone who knows and can answer I would be grateful to have a definitive answer. I have been unable to clear up my confusion about this by googling.
I am not understanding the below, which is the information on the irs webpage:
"What is the tax benefit of the lifetime learning credit? For the tax year, you may be able to claim a lifetime learning credit of up to $2,000 for qualified education expenses paid for all eligible students. There is no limit on the number of years the lifetime learning credit can be claimed for each student.
A tax credit reduces the amount of income tax you may have to pay. Unlike a deduction, which reduces the amount of income subject to tax, a credit directly reduces the tax itself. The lifetime learning credit is a nonrefundable credit.
This means that it can reduce your tax to zero, but if the credit is more than your tax the excess will not be refunded to you."
I am confused about that last line. Does this mean reduce your tax you pay at the time of filing? Or reduce your overall taxes? For example my tax I may owe at the end of the year could be 0. However I may have had 1000 withheld during the year. Can the lifetime learning credit refund me 1000? Or does it ONLY stop me from paying taxes at the end of the year and not allow me to get an extra refund?
Hope my question made sense.
Thank you so much guys!
