1098-T and back taxes

[Unicorntnt]

Hi there I’m a full time college student and wasn’t aware of how to fill out taxes until the last two years. With that being said I just realized I have 2021 and 2022 taxes that I never did and am wondering if I should go ahead and do back taxes as I have a 1098-T for both years? Will I still be able to claim my credit from them? Lastly, do I have to be employed to claim my 1098-T credit? Thank you so much in advance. 

[DavidD66]

It depends.  You may qualify for the American Opportunity Tax Credit.  

The Lifetime Learning Credit is not refundable. As a result, the credit won’t trigger a tax refund if it’s greater than your pre-credit tax liability.  Up to 40% of the American Opportunity Tax Credit is refundable. So, if your credit amount is more than the tax you owe before the credit is applied, you can get a tax refund of up to $1,000 ($2,500 x .40 = $1,000).

There’s an exception to the refundability rules, though. The credit isn’t refundable if you’re under 24 years of age at the end of the tax year and all the following conditions apply:

• you were either:
  • under age 18 at the end of the tax year
  • age 18 at the end of the tax year and your earned income was less than 50% of your support
  • age 19 to 23 at the end of the tax year, a full-time student, and your earned income was less than 50% of your support
• at least one of your parents was alive at the end of the tax year
• your filing status for the tax year isn’t married filing jointly

[Unicorntnt]

@DavidD66 Okay, so I have for the last two years received the American opportunity tax credit. My only parent passed away in 2017 (looking to file for 2021 and 2022 to receive credit from American opportunity). I had zero income work wise and did not have anyone claim me as a dependent as of with year since I was 19 by 2021. I was not married or claimed on any taxes, so I’m not sure where that leaves me? Do you think I would receive credit still given the circumstances? I filed 2023 and 2024 as I was employed but not employed for 2021 or 2022. 

[Hal_Al]

Q. Do you think I would receive credit for 2021 & 2022 still given the circumstances?

A.  Yes. The AOTC is only 40 % refundable, so the most you could get is $1000 + interest. 

There is a 4 time limit for claiming the AOTC. The AOTC is only good for undergrad college. So, if you will still be an undergrad in 2025 and/or 2026, you may want to use it then (worth up to $2500), instead of for 2021 and 2022. The time limit for filing 2021 is 4/15/25. 

[Unicorntnt]

@Hal_Al thank you so much! So I will be graduating under grads December of 2025 so I will get another 1098-T for this year which I should claim a AOTC. I am wondering if I claim in 2026 for 2025 taxes to get the AOTC can I still get AOTC for either 2021 or 2022? I am trying to back file to get the 1098-T and claim the past stimulus check for 2021 (was never claimed). Would it be best to file 1098-T for this next year and then 2022 to back credit and then just file 2021 to get the stimulus check? I am so sorry for all the questions I really appreciate your time. 

[Hal_Al]

Q.  Would it be best to file 1098-T for this next year and then 2022 to get back credit and then just file 2021 to get the stimulus check?

A. Assuming you had more than $4000 in tuition in both 2021 and 2022, claiming both the AOTC and stimulus on 2021 would negate the need to file 2022, at all. If if something goes wrong, you still get another year to file 2022.   The deadline for filing 2021 is 4/15/25 (3 years from the due date).

Q.  I am wondering if I claim in 2026 or 2025 taxes to get the AOTC can I still get AOTC for either 2021 or 2022?

You can still get 2022 or 2021 (but not both), if you claim 2025 (4 time limit). 

You will not qualify for the AOTC in 2026, if you graduate in Dec. 2025. But there is a non refundable credit (Lifetime Learning Credit) for those who have already completed four years of post secondary educ.