American Opportunity Tax Credit

[jenbaker75]

I have two daughters enrolled in college full-time in 2025, both with qualified education expenses reported on 1098-T.  Both are claimed as our dependents on our taxes (and not claimed by anyone else).  Turbotax has repeatedly stated both daughters do not qualify for the American Opportunity Tax Credit nor the Lifetime Learning Credit because a) somebody else can claim both girls and b) there were no net qualified education expenses. 

I have several times deleted forms (as another post suggested) and checked worksheets to be sure they are not marked as someone else's dependents and Turbotax has repeatedly stated both daughters do not qualify.

I read somewhere there is a glitch with Turbotax disqualifying students from the education credits.  Can you please explain how to override this glitch on the desktop version?  I know both daughters qualify, they have both qualified for years.

[Vanessa A]

Is the amount in box 5 greater than the amount in box 1?  If so, scholarship income would cause them to not have any qualified education expenses. 

[jenbaker75]

Yes, the amount (scholarships and grants) in Box 5 is greater than Box 1 (payments received) because our girls qualify for many scholarships, but we still make payments each semester toward tuition/fees.  So that should not negate their qualifying expenses entirely.  Box 1 on 1098_T from the university shows only what we have paid for tuition and fees out of pocket, all of which are qualifying expenses. 

Should Box 1 show instead ALL tuition and fees paid (whether out of pocket or by student aid)?  Then it would make sense that scholarships and grants are deducted and what is remaining (our out-of-pocket payments) would be qualifying expenses... 

[Hal_Al]

Q. Does Box 1 show ALL tuition and fees paid (whether out of pocket or by student aid)? 

A. Yes. 

Since the amount (scholarships and grants) in Box 5 is greater than Box 1, your students may (probably) actually have taxable income. 

But there's hope, see #4 at this  post on the five main points on form 1098-T:

https://ttlc.intuit.com/community/college-education/discussion/re-what-do-i-do-with-form-1098t/01/37...

[jenbaker75]

No, our box 1 does not show ALL tuition and fees paid, (including out of pocket and by student aid) .  It only shows what we have paid out of pocket.  Maybe this is a mistake from the university, which would explain why suddenly this year Turbotax can't find the credit, though we are eligible.

[Hal_Al · Accepted solution]

Q.  Box 1only shows what we have paid out of pocket.  Maybe this is a mistake from the university, which would explain why suddenly this year Turbotax can't find the credit, though we are eligible.

A. Yes, that's the explanation.  It is a mistake for the school to only show what you paid.

Q. How do you handle that?

A. See #3 at the "5 points of the 1098-T" post. 

[jenbaker75]

Thank you for the confirmation and for the helpful link you posted above!