Which program offers education tax benefits for qualified expenses?

The American Opportunity Credit is designed specifically to provide education tax benefits for eligible students and their qualified expenses. This credit allows taxpayers to claim a tax credit for tuition, fees, and course materials for higher education, targeting the costs associated with the first four years of post-secondary education. The credit can cover up to $2,500 per eligible student, and it is partially refundable, making it a valuable resource for students and families looking to offset the costs of college.

In contrast, the Earned Income Tax Credit primarily benefits low to moderate-income working individuals and families by reducing the amount of tax owed and potentially providing a refundable credit based on earned income and number of dependents, rather than directly targeting education costs.

The Home Mortgage Interest Deduction allows homeowners to deduct interest paid on a mortgage for their primary residence, which is unrelated to educational expenses. Lastly, the Net Investment Income Tax applies to individuals with significant investment income, imposing a 3.8% tax on that income, which does not provide any education-specific benefits. Thus, the American Opportunity Credit is the only program directly focusing on education-related expenses.