I am wondering if I was eligible for the American Opportunity Tax Credit in 2018?

Forum|Forum|5 years ago
August 26, 2020
1 reply
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I got a letter from the IRS stating that I owe money back because I wasn't apparently eligible for this and I just want to make sure that it's true.

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DoninGA

Employee

Since no one can see your 2018 tax return or know your education status, that question cannot be answered. TurboTax does not receive any information from the IRS concerning our tax return or tax refund after the tax return was accepted by the IRS.

Did you claim the AOC in four tax years before tax year 2018? If you did then you were not eligible for the AOC in 2018.

IRS website for the AOC - https://www.irs.gov/credits-deductions/individuals/aotc

xmasbaby0

Employee

And the other part is --if you were claimed as a dependent during any of the years you were a student, the person who claimed you could have gotten the AOC --and the number of times it can be used is a total of four--no matter who claimed it for your name and SSN. So you might need to find out if a parent used AOC for an education credit when they claimed you as a dependent.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

Hal_Al

Employee

Read the IRS letter carefully to see which technicality they are after you for.

The IRS has begun cracking down on schools that send out a 1098-T with box 1 blank. They are not always accepting an amount in box 2, of a 1098-T, as proof that you paid tuition. There was no additional proof required at the time you filed your return. The IRS may just want the proof , now, after the fact. You may only need to prove you actually paid tuition, with school statements and cancelled checks and/or bank or credit card statements.

But, a student, under age 24, is only eligible for the refundable portion (the $1000 on line 17c of form 1040 (2018), of the American Opportunity Credit ( AOC or AOTC) if he supports himself by working, even if he is not a dependent. You cannot be supporting yourself on parental support, 529 plans or student loans & grants. You must have actually paid tuition, not had it paid by scholarships & grants. It is usually best if the parent claims that credit. The age 24 rule is another common reason for an IRS letter. You may only need to prove, to them, that more than half your support came from earned income.

Also See https://www.irs.gov/individuals/education-credits-questions-and-answers Scroll down to “I received a letter from the IRS questioning my AOTC claim. What should I do?”

For full AOTC rules, see https://www.irs.gov/Individuals/AOTC