Turbotax student information worksheet applying AOC incorrectly

Forum|Forum|4 years ago
February 28, 2022
2 replies
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I've made withdrawals from a 529 plan that exactly match my qualified educational expenses, but TurboTax is showing taxes due from the 529 withdrawal. When I looks at the calculation in the student worksheet, it appears that Turbotax is applying a $10,000 credit on line 17 of the worksheet to account for the American Opportunity Credit, which I don't qualify for due to my income level, and TurboTax has indicated that I don't qualify for the AOC in messages that I get when completing the education expense section. I suspect that there may be a software error in the student worksheet. Can I just manually update the entry in the student worksheet to correct this, or is there a workaround? Appreciate any help on this!

Hal_Al

Employee

In the education interview, you should reach a screen titled "Choosing a larger education Credit". Verify that TT has entered $10,000 (the amount needed to get the maximum LLC) in the box on that page. You can change it, if needed. In your case, you want to change it to 0.

If you don't encounter that screen; try this: Go through the entire education interview until you reach a screen titled "Your Education Expenses Summary". Click edit next to the student's name. That should take you to a screen “Here’s your Education Summary”. Click edit next to “Education Information”. When you get to the screen titled “Amount Used to Calculate Education Deduction or Credit”, verify the amount you want to use or change it.

PLAN C. On the Student Information Worksheet (abbreviated Student Info Wk on the forms list), go to part VI and change line 17 (“Used for credit”) to 4000. Make the change in the first column. That will automatically change the other columns.

JMuldoonAuthor

Option 2 worked! Thanks so much for the help.

eajcrawford

I'm having a similar problem, or maybe exactly the same. My husband attended college and we did a 529 disbursement to cover it. TT kept telling me that we did not qualify for an education credit because of our income and then I could tell that it added to our total tax owed. I'm confused by the instructions you were given to fix it though!