Education Expenses

Select "Yes" for Education Expenses and the Dependent Education Expenses Page will open after selecting "Save" on the Dependent and Household Member Information main page. 

Select "Help Me Decide" when unsure, a page will open with questions, the system will determine this with the answers given.

IMPORTANT: 

Beginning Tax Year 2018 a dependent must have received a Form 1098-T to qualify for the partially refundable American Opportunity Credit or Lifetime Learning Credit.  The IRS will not allow this credit if the Form 1098-T information is missing.

This credit is partially refundable, and has a four year limit. Both the Hope Credit and American Opportunity Credit are included in this four year limit. This credit is reported on Form 8863. 

- To claim the full credit, your MAGI, modified adjusted gross income must be $80,000 or less for filing status Single, Head of Household, or Qualified Widower. 

  ($160,000 or less for married filing jointly). 

- You receive a reduced amount of the credit if your MAGI is over $80,000 but less than $90,000 for filing status Single, Head of Household, or Qualified Widower.

  (over $160,000 but less than $180,000 for Married Filing Jointly).

- The credit is reduced to $0 when you MAGI is $90,000 for filing status Single, Head of Household, or Qualified Widower ($180,000 for Married Filing Jointly). 

IMPORTANT: 

Beginning Tax Year 2018 a dependent must have received a Form 1098-T to qualify for the partially refundable American Opportunity Credit or Lifetime Learning Credit.  The IRS will not allow this credit if the Form 1098-T information is missing.

This Credit is nonrefundable, and there is no limit to the how many times it can be taken. 

- To claim the full credit, your MAGI, modified adjusted gross income must be $65,000 or less for filing status Single, Head of Household, or Qualified Widower (or $130,000 or less for Married Filing Jointly). 

- You receive a reduced amount of the credit when your MAGI is between $55,000 and $65,000 for filing status Single, Head of Household, or Qualified Widower (between $111,000 but less than $130,000 for Married Filing Jointly).

- The credit is reduced to $0 when you MAGI is over $65,000 for filing status Single, Head of Household, or Qualified Widower   (over $130,000 for Married Filing Jointly).

The Tuition and Fees Deduction has expired as of December 31, 2016.   The following information is applicable for tax year 2016 and before. 

The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000. This deduction is claimed as an adjustment to income. This means you can claim this deduction even if you don't itemize deductions on Schedule A (Form 1040).

Required Education Expenses Paid to Educational Institution: 

Enter here the amount from Form 1098-T, Tuition and Fees Statement  Box 1 or Box 2. 

Other Needed Course Related Materials:

Enter here any other qualified education expenses (i.e. Books, Supplies, etc).

Education Expenses Adjustments:

Tax-Free Assistance Received in prior year (current tax year):

Box 5 of Form 1098-T Tuition Statement

Enter in the first box any Grants, Scholarships, and other tax-free educational assistance received. 

Tax-Free Assistance Received the current year (not current tax year):

Box 7 is checked of Form 1098-T Tuition Statement 

Enter in the middle box any tax-free educational assistance that belongs to the Spring Semester. 

IMPORTANT: Box 7: This is checked when Box 1 and Box 2 include amounts for the Spring Semester.

DO NOT include any educational assistance for the current year Summer Semester or Current Year Fall Semester,

Refunds Paid in prior year (current tax year):

Enter in the third box any refunds received for qualified education expenses paid.  

Generally, these are refunds to an amount shown in Box 1 or Box 2 of the Form 1098-T Tuition Statement. 

Use this box for prior year refund amounts, and Spring Semester refund amounts. 

The Credit/Deduction is calculated using any remaining expense amount after adjustments.

The following questions must be answered, failure to answer all questions will result in the return not including a Education Tax Credit or Deduction. 

2017 Tax Year : 

The following information includes the expired Tuition and Fees Deduction option.  This is no longer available on the 2017 tax return. 

The nonrefundable Lifetime Learning Credit is the default option for qualifying education expenses, the refundable American Opportunity Credit will only generate in qualifying returns that have all required information entered.    

2016 Tax Year and Earlier:

How should the system treat these expenses? Form 1040 will reflect the selection to this question. 

• When "Let the system decide" is selected, the system will calculate all options and the return will have the one that is the larger amount.

Caution: Let the system decide does not reflect the difference the amounts have to Form 1040. The amount is solely based on the Education Expenses, and gives you the larger of Tax Credit or Tuition and Fee Deduction.

You can change this by either selecting "Adjustment" or "Tax Credit" and the system will carry over the applicable selection.

• If a dependent qualifies for both the American Opportunity Credit and the Lifetime Learning Credit, the American Opportunity Credit will be given. When the Lifetime Learning Credit is desired instead, check the box to Elect the Lifetime Credit.   

IMPORTANT:

Beginning Tax Year 2016 a dependent must have received a Form 1098-T to qualify for the partially refundable American Opportunity Credit. The IRS will not allow this credit if the Form 1098-T information is missing.

Each Dependent can have (2) Form 1098-T's. You will not be able to use this system if a dependent has (3) or more Form 1098-T's to enter.