Education Deductions & Credits - Lifetime Learning Credit and American Opportunity Credit

[ecpike]

I earned $4,000 on my W2 for 2016 and my tuition cost $15,677 (which I am paying for with student loans). Yet, while I received a tuition deduction, it says I am ineligible for the Lifetime Learning Credit and American Opportunity Credit and I'm confused as to why. I'm a full-time student, over age 24, in a degree program, single, and definitely did not receive income greater than $90k. Was greatly hoping someone could help clear this up for me. Also, why does my 1098-T treat loan money like scholarship or grant money. That is also greatly confusing to me.

Thank you for help clarifying these issues!

[Carl]

See https://www.irs.gov/pub/irs-pdf/p970.pdf page 22 and see  the criteria under "Who can't claim the credit". Note the last item reads "You claim the American Opportunity Credit or a Tuition and Fees Deduction for the same student in 2016". So you get one or the other. Not both.

Also, your 1098-T does not treat borrowed money like a scholarship at all. Anything reported in box 5 of the 1098-T is scholarship, grant, or 529 money. Not borrowed money.