Life tome.learning credit for graduate..

Forum|Forum|3 years ago
February 10, 2023
2 replies
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I thought I was done with all this!

Here we go.... My daughter is 22 and lives at home working 2 part time jobs and attending school.

Her 4th semester of college occurred in the Spring of 2022 during which she graduated. She was a full time student during this time. She then started up graduate school in the fall of 2022 part time.

I received a1099T from her graduate school: 3800. I received a 1099Q showing an amount of 3800 as well. I also received a1099T from her 4 year school showing that semesters payments:13k.

I decided to enter all 3 of these into my tax return as I have done each year. As usual I added my daughter since she lives at home and we spend well over 50% of what it costs her to live. I was not expecting any credits or anything as I have had the American opportunity credit for 4 years already.

To my surprise it seems to indicate we earned something called the lifetime learning credit to the tune of about $900. The $900 was based off approximately $4500which I cannot figure how TT calculated.

Does this somehow make sense. Am I somehow entitled to this.... I was not expecting it. I generally understand 75% of how all this works and the rest is sort of a faith and turbo tox.

TurboTax Home & Biz Windows

ThomasM125

You may be entitled to the Lifetime Learning Credit. It kicks in after your eligibility for the Amarican Opportunities credit ends. The credit is 20% of the first $10,000 worth of education expenses. There are limitation on receiveing it based on your income (must be under $180,00 for joint filers in 2022 and $90,000 for single filers.) It is not limited to a certain number of years of school and you don't need to be enrolled in a degree program. You can lean more here: Lifetime Learning Credit

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confusedrfAuthor

Is it a one time thing

BillM223

No, you can get the Lifetime Learning Credit year after year if you qualify. "There is no limit on the number of years you can claim the credit" - see this IRS page.

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Hal_Al

Employee

The Lifetime Learning Credit (LLC) should be $2000 based on the $13K undergrad 1098-T. The $3800 Grad school tuition offsets the 1099-Q for $3800. Although you could have offset the $3800 1099-Q with room and board. I assume the $3800 was in box 1 of the 1099-Q and the $13K was in box 1 of the 1098-T. Was there an amount in box 5 of the 1099-T?

The LLC is non refundable and can only be used to offset an actual tax liability.

confusedrfAuthor

I am looking at this again. To answer your questions there is nothing in any Box 5 anywhere.

I am trying to figure out how it came up with the 4493 number. I am looking at form 8863 I'm not sure what's going on here but in the end it seems to end up with the 899 amount in the non refundable section.

Form 8863 page 2 line 31 lifetime learning credit shows the 4493 number.

On the 1st page in line 12 it seems to be multiplying the 4493 by 20% to get the 899.

On form 1040 on line 16 it lists my tax and then it seems to reduce that tax by a $500 child credit and then further by the $899. Then in line 23 under other taxes it adds back in $1466 for the SE tax which I'm not even sure what that is but my wife is self employed so hopefully that makes sense.... In the end when looking at the tax I owed versus what we paid in and factoring in her estimated taxes on line 26 we end up with a refund.

However I believe my refund would be $899 less had the 899 not appeared on line 20 on the 1040 form.

I wonder who dreams all this craziness up!