Can you take american opportunity credit

To be eligible to claim the AOTC or the lifetime learning credit LLC , the law requires a taxpayer or a dependent to have received Form T, Tuition Statement, from an eligible educational institution, whether domestic or foreign. This statement helps you figure your credit.

The form will have an amount in box 1 to show the amounts received during the year. But this amount may not be the amount you can claim. Check the Form T to make sure it is correct. Make sure you are qualified before claiming the credit.

Where is My Refund? Why eFile? There are two major education tax credits available to students to help offset the costs of higher education: The American Opportunity Credit and the Lifetime Learning Credit. Tax credits are frequently more valuable than tax deductions because credits reduce your tax bill dollar-for-dollar while deductions only reduce your taxable income.

When you prepare your Taxes with eFile. The American Opportunity tax credit is a partially refundable tax credit as it allows for up to 40 percent of the credit as a tax payment if you qualify to claim this credit for education expenses.

When you prepare and e-File your taxes, the eFile. Of the two education credits currently available, the American Opportunity Credit is the most valuable. Here is what you need to know:. If you, your spouse, or your dependent do not qualify for the American Opportunity Credit, you may still be able to claim the Lifetime Learning Credit. Whether an expenditure for a computer qualifies for the credit depends on the facts.

An expenditure for a computer would qualify for the credit if the computer is needed as a condition of enrollment or attendance at the educational institution. You will be able to reduce your tax liability by one dollar for each dollar of credit for which you're eligible.

It is the taxpayer's adjusted gross income increased by foreign income that was excluded, and by income excluded from sources in Puerto Rico or certain U. You cannot claim the tuition and fees tax deduction in the same taxable year that you claim the American opportunity tax credit or the Lifetime Learning credit. You must choose between taking an education tax credit or taking the deduction for tuition and fees.

You also cannot claim the tuition and fees tax deduction if anyone else claims the American opportunity tax credit or the Lifetime Learning credit for you in the same taxable year. Although the credit will usually result in greater tax savings, taxpayers should calculate both the tax credit and the deduction on the tax return to see which is most beneficial. Often, tax software will automatically compare the tax result, from taking the education credit or taking the deduction, for you.

Educational institutions are required to file a Form T, Tuition Statement PDF , with the IRS and to provide a copy of the form to the student, for each enrolled student for whom there is a reportable transaction. A reportable transaction includes payments received, amounts billed or refunds made for tuition and related expenses. For the Form T to be accurately prepared, the educational institution must address boxes 8 and 9. Note that box 8 will be checked if the student was enrolled at least half-time, and box 9 will be checked if the student was enrolled as a graduate student.

There are some exceptions where an educational institution is not required to file and provide the Form T. These exceptions include:. A student can check with the educational institution. However, this link from the Department of Education, Database of Accredited Postsecondary Institutions and Programs , shows all accredited schools. If your school is found using this link, then it is an eligible institution and you can claim the American opportunity tax credit.

Know what tax documents you'll need upfront Get started. Learn what education credits and deductions you qualify for and claim them on your tax return Get started. The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice.

Skip To Main Content. Eligibility requirements A student eligible for the American Opportunity tax credit : Has not completed the first four years of post-secondary education. Enrolls in at least one academic semester during the applicable tax year. Maintains at least half-time status in a program leading to a degree or other credential. Eligible educational institutions can be more than just colleges and universities; they can also include any post-secondary school that satisfies the requirements to participate in the U.

Department of Education financial aid program. So long as the purchased item relates to the program of study, qualifying expenses for the American Opportunity credit can include the cost of: Books Supplies Equipment The credit does not cover costs associated with: Room Board Transportation Medical insurance.