A nonrefundable tax credit up to a certain dollar amount per family for all undergraduate and graduate level education. The Lifetime Learning Credit is calculated by taking a percentage of the qualified educational expenses paid. This information is found in Publication 970, Chapter 3.

References:

• Publication 970, Tax Benefits for Education
• Tax Topic 605, Education Credits
• Form 8863 (PDF), Education Credits (Hope and Lifetime Learning Credits)

Source: www.irs.gov