Claim the Lifetime Learning tax credit instead of the American Opportunity tax credit.

The parents may want to claim the Lifetime Learning tax credit in the first college term of the student’s first year in college and then claim the American Opportunity Credit for the following years of college. Alternatively, since the Lifetime Learning Credit can be a larger credit than the American Opportunity Credit, the Lifetime Learning Credit may be claimed for all of the college years, including the first two years.