Education tax credit

[mnoday2011]

I keep getting told that I am not eligible for an education tax credit but I know that I am. I'm in my second year of graduate school and had no problems getting a Lifetime Learning Credit through turbotax last year, but even though nothing has changed since last year I'm suddenly being told I am not eligible? I even went through the IRS website and did a questionnaire thing that told me I am eligible. Is there something I can do to fix this? For reference, I am single, I paid for my education through student loans, I am not claimed as a dependent by someone else, tuition and fees are $39,760, my income was only $5,903 due to being a full time graduate student but I also received around $20,000 in refunds from my student loans to cover expenses. Could there be something I am doing wrong or something about me that is causing me to not qualify?

[DawnC]

Do you have any tax liability (check Line 16 of Form 1040)?   Education credits are generally not refundable, so if you have no tax liability, no credit....  

Search for letme (one word, no space), and select the Jump to letme link.   On the Education Credits and Deduction screen, you can view more information about your education credits.

Here is a summary of the available education tax credits and their requirements.   

[Hal_Al · Accepted solution]

The Lifetime learning Credit (LLC) is a non refundable credit. It can only be used to reduce your tax liability.  You have no tax liability because you don't have enough income (under $12,950). "Refunds" from  student loans are not income, reportable or taxable.

If you reported refunds from  student loans, as income , last year, you should be looking at amending your 2021 return. 

[mnoday2011]

Okay that makes much more sense, I didn't see that there was a minimum income needed for tax liability. I did not claim my student loan refunds as income last year or this year, I only mentioned it as reasoning for the very low income. Last year I had a full time job until graduate school started in September so I had a significantly higher income and tax liability. 

Thank you for your help!