Why would we not be eligible for the American Opportunity Credit? We entered the 1098-T.

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March 30, 2024
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Hal_Al

Employee

If you are eligible, you have answered something wrong, in the interview. But, a lot of people are just not eligible. Box 1 of the 1098-T must be more than box 5.

Rules: https://www.irs.gov/Individuals/AOTC

There's a new urban myth among college students that says they can get a $1000 from the government just for filing a tax form. For most of them, they simply aren't eligible. A full time unmarried student, under age 24, even if you don't qualify as a dependent, is only eligible for the refundable portion of the American Opportunity Credit if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans or student loans & grants. It is usually best if the parent claims that credit.

You cannot claim a credit if you are, or can be, claimed as a dependent by someone else.

Reference: Line 7 instructions for form 8863. https://www.irs.gov/instructions/i8863

matkat518Author

Thank you for your reply. I'm not sure what interview you mean. Only Box 1 is populated. We paid the full tuition out of pocket. Our son is 19, and a full-time college student.

LeticiaF1

The interview that Hal_AI mentioned, is just the way TurboTax asks questions as it guides you during your tax return preparation. The program uses those answers to determine what credits you are eligible for. If you are having difficulties with the education credits, it could be that you answered one of those questions incorrectly. You should go back to your Form 1098-T, and go through those questions again, to verify that everything is correct. To go back follow the steps below:

Open or continue your return.
Select Search and enter Form 1098-T.
Select Jump to form 1098-t.
Continue through the interview and check all your answers.

There are two different education credits that you may be eligible to claim, the Lifetime Learning credit and the American Opportunity credit. Both of them have different requirements, so the questions the program asks are to determine what credit you could claim.

Some things that could be disqualifying you could be your income. Both credits have Modified adjusted gross income (MAGI) limits, your MAGI should be below $90,000 or $180,000 if Married Filing Jointly. When you are entering the information make sure you enter all your expenses like books and required supplies. Double-check your entries in Box 1 and Box 5 on your 1098-T.

For more information on the credits see the TurboTax help article What education tax credits are available?

@matkat518

[Edited 4/3/24 | 8:07AM PST ]