Distribution of Education Tax Benefits by Income over Time

The implementation of the American Opportunity Tax Credit in 2009 shifted the benefits of the education tax credits from filers with incomes between $25,000 and $100,000 to those with lower and higher incomes.

Figure 26A: Distribution of Education Tax Credits by Adjusted Gross Income, 2006, 2011, and 2016

Notes & Sources 

NOTES: The total and average values of tax credits and deductions are best estimates based on data from the Internal Revenue Service. A portion of nonrefundable dollars claimed on nontaxable returns is excluded to account for credits and deductions that do not reduce tax liability. The value of tax deductions is estimated based on applicable marginal tax rates. Percentages may not sum to 100 because of rounding.

SOURCES: Internal Revenue Service, Statistics of Income 1998 to 2016, Tables 1.3, 1.4, 3.3; calculations by the authors.

  • In 2016, about a quarter of the benefits of the federal education tax credits went to tax filers with incomes between $100,000 and $180,000; a slightly smaller share went to filers with incomes of $25,000 or less; and just over half went to those with incomes between $25,000 and $100,000.
  • Tax savings for students and parents who claimed education tax credits averaged about $1,500 in 2016.