I am being asked if this is my first year of school at a college or eligible school as of January 1, 2018. Is that asking if 2018 was my first semester or full year?

[MinhT]

If you are in your first college year at the start of 2018 (either first or second semester), then you can answer YES to that question.

[texast]

For clarification please... my daughter started her first semester in fall 2018. With the question being "is this her first year in college as of Jan 1, 2019?", would we answer yes or no. Just not sure if it means a 12 month year or if she attended Fall 2018 and all of 2019 what we should list as the answer. Thank you for any insight.

[MaryK4]

@texast Great question!  When the IRS is asking for first year they mean first CALENDAR year as opposed to ACADEMIC year so it would be no since she attended in 2018.

[ccbrianf]

If a student was dual enrolled beginning their senior year of high school part time or less in a non-degree seeking program at the time (by nature of the high school diploma requirement to be otherwise) and then later enters college in the fall full time in a degree seeking program, which year counts as the first for this question?

Also, why does the question specifically ask about January 1st if the previous answer states that actually just means during that calendar year?   That seems contradictory enough that I'm questioning that answer being correct for a first year with only fall enrollment.

[MarilynG1]

If your student dependent was enrolled less than half-time in a non-degree program, that would not make them eligible for an Education Credit.   You may be able to deduct any cost of that program as an Education Expense, however.

If the student then enrolled in a degree program for the fall semester, at least half-time, that portion would be eligible for an Education Credit. 

You can make two separate entries for these events in the Education section in TurboTax, and the program will calculate the best credit/deduction for you.

Click this link for more info on Education Credits.

Since your student did not attend in 2020, you can answer YES to the question 'is this the first year...?' 

[ccbrianf]

I'm sorry, but I don't feel you clearly answered either one of my questions, and you also added even more confusion.

In one of my two cases, my son was enrolled as half time in a non-degree seeking dual enrollment program at a local community college as a high school senior for the fall 2021 semester.  You say that does not make him eligible for an Education Credit, but both the link you provided and this one:

https://ttlc.intuit.com/community/college-education/discussion/can-i-take-a-deduction-for-my-daughte...

say he would be eligible for the Lifetime Learning credit.

In the other case, my other son had a less than half time load in a similar high school senior community college dual enrollment situation for the fall of 2018 and spring of 2019.  In the fall of 2021, he entered a degree seeking program as a full time community college student.

Both are my dependents and eligible for Education Credits as I understand it, but none of this tells me how to answer the question about what to consider the first year of college as of January 1, 2021 to be, except possibly your statement about my student(s) not having attended in 2020, which was information I had not previously provided.

[KrisD15 · Accepted solution]

The reason the TurboTax program asks if this was the student's first year as of January 1, 2021 is because if it was not, the program will ask if the American Opportunity Tax Credit (AOTC) had been taken in any prior year, and if so, how many times. 

If the answer is "Yes" this was the student's first year, the program knows that the AOTC has not been used yet. 

If you answer "No" the program will go on to ask if the AOTC or Hope Credit (which was from years ago) was used and how many times. This all has to do with the program making sure the credits are not used more than allowed. It would not cause an "error" to select "No" rather than "Yes', but you would be subject to those additional questions about previous usage of the credit.

For the student that started in the Fall of 2021, you could choose either answer, since we know he/you could not have claimed the AOTC for expenses relating to "non-degree seeking" classes. 

As far as the credits for the expenses/time the students were dual enrolled, the payments would need to have been made to the college and the purpose would need to have been part of the requirements of a degree or to improve job skills. 

According to the IRS:

"For purposes of the lifetime learning credit, qualified education expenses are tuition and certain related expenses required for enrollment in a course at an eligible educational institution. The course must be either part of a postsecondary degree program or taken by the student to acquire or improve job skills."

To be eligible to claim the American opportunity credit or lifetime learning credit, the law requires a taxpayer (or a dependent) to have received Form 1098-T, Tuition Statement, from an eligible educational institution, whether domestic or foreign."

Also, I might suggest that if you anticipate the students may have more than 4 calendar years of school expenses of postsecondary education, you look over IRS Pub 970. The AOTC is usually worth more than the Lifetime Learning credit, but not always! Don't waste a year on the AOTC if the Lifetime Learning Credit has the same result. The AOTC is usually best used for the years you have the highest amount of expenses, but at the same time, once the student achieves the degree, the AOTC is no longer an option. The AOTC MAY be used for the year the student DOES earn the degree as long as the student is "at least half time" for that year as well. 

Expenses paid in the tax year for that tax year and/or the first three months of the following year count. 

IRS Pub 970

[miami98]

I am being asked this question also, I went to a community college for the last few years until spring 2022 and then I transferred to a four-year university which was my first-semester last year at that university. 

[KrisD15]

It is only asked to determine if TurboTax needs to ask MORE questions in order to find out if you ever took the American Opportunity Tax Credit.

If this is your first year, obviously you could not have taken the credit previously. 

If you answer "No" this was NOT your first year, the program will go on to ask if you claimed the credit and how many times. 

The American Opportunity Tax Credit can only be claimed four times per student.

There is also the Lifetime Learners Credit which as no limit on use.