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March 20, 2022
Question

My tuition deduction on AGI

  • March 20, 2022
  • 2 replies
  • 0 views

In the 2020 tax return, 1098-T  amount was deducted from income but in 2021 it is not being deducted.  Is it normal?

    2 replies

    March 20, 2022

    It depends. Your 1098-T may qualify you for an education credit. One of them, the American Opportunity Credit can reduce your taxes for the first $2,000 of tuition you pay and can give you a credit of $2,500 on your tax return.

     

    There can be a number of reasons you got it last year but not this year. The credit is for education expenses you pay, so if the amount of scholarship income reported in Box 5 exceeds the amount of tuition paid in Box 1, then you may not be eligible for any credit. If you have taken the American Opportunity credit for four years already, you would not be eligible. You would also not be eligible if you aren't a full-time student or if your income exceeds the threshold for your filing status. The full list of qualifications is at the link above. 

     

    If you are not eligible for the American Opportunity Credit, you may still qualify for the Lifetime Learning Credit. It is a smaller credit, and even if you are eligible for it, it will not help you if you do not have any taxable income.

     

    Lastly, if you are listed as a dependent on someone else's return, they are the ones who would receive either of the tax credits, not you. If you feel you should qualify for one or both of these credits, then you may want to check your entries on the 1098-T screen to make sure everything is entered accurately. Pay particular attention to the amounts in Box 1 and Box 5. Make sure you answer all the questions because if you do not go all the way through the interview, TurboTax will not be able to determine which credit you are eligible for. 

    March 20, 2022

    Thank you. I got life time credit but last year deducted on AGI but this year it is not. I got the change done by goverment effective from this year. 

    Hal_Al
    Employee
    March 20, 2022

    Congress eliminated the tuition deduction  (known as the Tuition and Fees Deduction - TFD) starting in 2021.   There are still two Education Credits available as described by RaifH.

     

    As you noted, the TFD was actually an Adjustment to income (an "above the line" deduction) affecting your AGI.  

    March 20, 2022

    Thank you. Unluckiness 😞