AOTC Eligibility :Graduate Student

[debadeep]

I and my spouse hold individual W2 and 1098T.

In the 1098T , we both have box 1 filled and box 9 checked as a graduate student.

If the Annual income meets the criteria can I claim for AOTC?

I am reading guidelines that Graduate Students are not eligible for AOTC. Is that correct?

[Bsch4477]

Correct. AOC is for the first 4 years of college. However you can claim Lifetime Learning Credit if otherwise qualified. 

[HelenC12 · Accepted solution]

Yes, that is correct. Graduate students are not eligible for the American Opportunity Tax Credit (AOTC).

• The AOTC is only for the first four years of college when working towards a degree. 

However, you may be eligible for the Lifetime Learning credit or the Tuition and Fees Deduction. 

As you enter your respective 1098-T forms, TurboTax will select the best tax option for you tax situation. 

[BK08]

What if you only completed two years of undergraduate before going to graduate school?

[Bsch4477]

No AOC for grad school. 

[tcbushman]

The IRS Q and A mentions you can use it in grad school so long as you have not completed four years of post high school education and have not claimed it four times (https://www.irs.gov/credits-deductions/individuals/education-credits-questions-and-answers) - see Q9. Although I'm still hazy on whether I had completed four years of post secondary education if I graduated with a bachelor's in 3 years post high school because of AP and language credit I tested out of.

 If I completed my bachelor's degree in 3 academic years (2013-16) could I have claimed the American Opportunity Credit for 2018 during my first year of grad school? The AOTC was claimed by/for me in 2014, 2015, and 2016, so if I have one more year of eligibility I would like to amend my 2018 return to claim it as that would significantly increase my refund. And are they counting academic years or tax year for the "four years" as I was in college during 2013, 2014, 2015, and 2016, but that is only 3 academic years (again I only claimed it 3x, my parents did not claim it for me in 2013).

Sorry for beating the dead horse, but would make a big difference if I can claim it for the first year of grad school.

[DMarkM1]

So you have met the criteria for the second question; have not claimed 4 yrs of AOTC.  The question you have to answer is at the beginning of tax year 2018 had you completed the first four years of post-secondary (education after high school)?  It appears you had and thus would not be eligible.      

[nuketrader]

If the student completed his/her undergrad degree in 3 years, I think he/she would be eligible for the AOTC credit for1st year in grad school.

[DaveF1006]

No this is an incorrect assumption. IRS Publication 970 clearly states that eligible students are those students who have not completed the first 4 years of postsecondary education (generally, the freshman, sophomore, junior, and senior years of college) before 2020. 

Please verify this in the following link and look under "Who is an Eligible Student."

@nuketrader

[xmasbaby0]

@nuketrader Sorry--no, you cannot use the AOC if you are a grad student even if you completed your undergraduate degree in less than four years.   But you can use the Lifetime Learning Credit instead while you are a grad student.

https://ttlc.intuit.com/questions/3262984-who-is-eligible-for-the-lifetime-learning-credit

https://ttlc.intuit.com/community/credits-and-deductions/help/who-is-eligible-to-take-the-american-o...