Solved: Help me with the American Opportunity Tax Credit. Despite entry of all expenses and related scholarships and grants, the software is not generated the $2,500 credit.
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Help me with the American Opportunity Tax Credit. Despite entry of all expenses and related scholarships and grants, the software is not generated the $2,500 credit.

 
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Level 3

Help me with the American Opportunity Tax Credit. Despite entry of all expenses and related scholarships and grants, the software is not generated the $2,500 credit.

When you are being given the American Opportunity Credit on your return after entering a 1098-T, there could be several reasons

  1. Your expenses were NOT more than your scholarships or grants
  2. You are under 24, one or both of your parents are still living and you did not have a tax liability on line 11 of your 1040.  If you are under 24 and at least one of your parents are alive, you are ONLY eligible for the nonrefundable portion of the AOTC.  This means you cannot get more than what is on line 11 of your 1040
  3. Someone else is claiming you as a dependent
  4. Is your school an eligible institution with the Department of Education?
  5. Something was entered incorrectly in the interview section. Did you answer that you were at least a half time student?  Are you in the first four years of higher education?  Are you pursuing a degree or certification?
  6. Your income is too high.  The limit for a single person is $80,000 for the full credit $90,000 for a reduced credit.

https://www.irs.gov/credits-deductions/individuals/aotc

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7 Replies
Level 3

Help me with the American Opportunity Tax Credit. Despite entry of all expenses and related scholarships and grants, the software is not generated the $2,500 credit.

Are you claimed as a dependent?  Were your expenses MORE than your grants and scholarships?  How much more?  Do you have a tax liability?  Were you a full time student?  What year student were you?
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New Member

Help me with the American Opportunity Tax Credit. Despite entry of all expenses and related scholarships and grants, the software is not generated the $2,500 credit.

My question relates to the parents' tax return, not the student's/dependent's tax return
Level 3

Help me with the American Opportunity Tax Credit. Despite entry of all expenses and related scholarships and grants, the software is not generated the $2,500 credit.

Ok, so then need more information. How old is the dependent?  Was your income too high? What were their net education expenses? Was is your filing status?
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New Member

Help me with the American Opportunity Tax Credit. Despite entry of all expenses and related scholarships and grants, the software is not generated the $2,500 credit.

Publication 970 provides that if the adjusted qualified educational expenses (AQE) are $4,000 or more, then, we should get the full AOTC credit of $2,500.  I calculate AQE to be $11,000 + and the software is not working to provide the full credit.  It worked last year, but this same version (Premier) on my MAC is not working.
Level 3

Help me with the American Opportunity Tax Credit. Despite entry of all expenses and related scholarships and grants, the software is not generated the $2,500 credit.

The $4,000 is the VERY basic qualification. You have to meet ALL of the criteria.  Is the student working on their bachelors or have they completed it? Are you getting ANY credit at all?  Is there a number on Schedule 3 line 50 or your 1040 line 17c?  If so, how much?  
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Level 3

Help me with the American Opportunity Tax Credit. Despite entry of all expenses and related scholarships and grants, the software is not generated the $2,500 credit.

Did you click Maximize credit at the end of the education section?
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Level 3

Help me with the American Opportunity Tax Credit. Despite entry of all expenses and related scholarships and grants, the software is not generated the $2,500 credit.

When you are being given the American Opportunity Credit on your return after entering a 1098-T, there could be several reasons

  1. Your expenses were NOT more than your scholarships or grants
  2. You are under 24, one or both of your parents are still living and you did not have a tax liability on line 11 of your 1040.  If you are under 24 and at least one of your parents are alive, you are ONLY eligible for the nonrefundable portion of the AOTC.  This means you cannot get more than what is on line 11 of your 1040
  3. Someone else is claiming you as a dependent
  4. Is your school an eligible institution with the Department of Education?
  5. Something was entered incorrectly in the interview section. Did you answer that you were at least a half time student?  Are you in the first four years of higher education?  Are you pursuing a degree or certification?
  6. Your income is too high.  The limit for a single person is $80,000 for the full credit $90,000 for a reduced credit.

https://www.irs.gov/credits-deductions/individuals/aotc

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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