1099-T and AOTC for a college senior

[acharo]

I have a child who graduated college in May 2018.  For tax year 2017, I received a 1099-T that reported tuition payments made prior to January 1, 2018 for the fall 2017 and spring 2018 semesters. As no tuition payments were made in calendar year 2018, I did not receive a 1099-T for tax year 2018.  Unless I am missing something, TurboTax for 2018 does not allow one to apply for the American Opportunity Tax Credit (AOTC) absent a 1099-T.  However, tuition was indeed paid for education expenses in 2018, albeit via a payment recorded in 2017.  Can you advise if the program is correct that the AOTC is not available under these circumstances?  If it is, how does one claim it?  Thank you.

[KrisD · Accepted solution]

Education credits are based on expenses paid in the tax year. You can pre-pay up to 3 months. (pay in December for Jan classes) and claim the payment in the year the payment was made, but you can't go backward. 

If you paid in 2017 for 2018 classes, you can only report those expenses on your 2017 return. 

According to the IRS:

Prepaid expenses. “Qualified education expenses paid in 2018 for an academic period that begins in the first 3 months of 2019 can be used in figuring an education credit for 2018 only. See Academic period, earlier. For example, if you pay $2,000 in December 2018 for qualified tuition for the 2019 winter quarter that begins in January 2019, you can use that $2,000 in figuring an education credit for 2018 only (if you meet all the other requirements).

You can't use any amount you paid in 2017 or 2019 to figure the qualified education expenses you use to figure your 2018 education credit(s).”

CLICK HERE for IRS Pub 970 Education Credits