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I am having trouble with the education credits. I believe, as a grad student with income less than 7K and only a small $650 scholarship I qualify. Can someone explain?

I graduated undergrad in the spring, paid about 3K in tuition (this shows up in box 1 on the 1098-T) more than half-time student.  
I started grad school at a new school as a more than half-time student and paid tuition with loans and small scholarship.  Tuition and fees of about 6K show up in box 2 on that 1098-T form.  I am not sure why, but there is no value in box 1.  In the program I selected "but this isn't the amount I paid the university" and entered the amount I paid with loans, scholarship and savings in that box.

I have an income of less than 7K for the year and had to take out loans to pay for tuition and living.  Am I wrong? Do I really not qualify? or is it possible I or the program screwed up?  If so, how do I fix this?
Thank you for your help!  Trying not to rip my hair out over here!
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I am having trouble with the education credits. I believe, as a grad student with income less than 7K and only a small $650 scholarship I qualify. Can someone explain?

Are you a dependent on parent's return?  I am going to assume you are not.  If you are that can be the reason you are not getting any of the credits.

 There are a couple of things that could be going on.  

If you have income of less than $7000 and no one else claims you on their return, your tax liability is $0.

The Lifetime learning credit is a non- refundable credit.  Which means at your income level, if you have $0 taxable income, you would not get the credit because it is non-refundable. 

The American Opportunity Credit can only be claimed for the first four years of college education. You can also only claim the credit 4 years.  

This credit is refundable up to 40% of the credit.  So for you, the AOC  tentative credit would be $2250.   at 40% refundable $900.00 refund.  $900.00 is the maximum amount this credit could affect your taxes.

I am going to attach some more information.  If you have any more information, get back to me.

IRS PUB 970

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4 Replies

I am having trouble with the education credits. I believe, as a grad student with income less than 7K and only a small $650 scholarship I qualify. Can someone explain?

Are you a dependent on parent's return?  I am going to assume you are not.  If you are that can be the reason you are not getting any of the credits.

 There are a couple of things that could be going on.  

If you have income of less than $7000 and no one else claims you on their return, your tax liability is $0.

The Lifetime learning credit is a non- refundable credit.  Which means at your income level, if you have $0 taxable income, you would not get the credit because it is non-refundable. 

The American Opportunity Credit can only be claimed for the first four years of college education. You can also only claim the credit 4 years.  

This credit is refundable up to 40% of the credit.  So for you, the AOC  tentative credit would be $2250.   at 40% refundable $900.00 refund.  $900.00 is the maximum amount this credit could affect your taxes.

I am going to attach some more information.  If you have any more information, get back to me.

IRS PUB 970

I am having trouble with the education credits. I believe, as a grad student with income less than 7K and only a small $650 scholarship I qualify. Can someone explain?

Should I get the American Opportunity credit if it was still my 4th year of college in the spring?  Or is it related to how many years it’s been claimed on taxes?  When I was still a dependent my parents never received the credit so I couldn’t be because we claimed it too many times

I am having trouble with the education credits. I believe, as a grad student with income less than 7K and only a small $650 scholarship I qualify. Can someone explain?

I take it the program is not telling why you do not get the credit. The 4 year rule is two-fold. If you had already claimed the AOC  for four years OR if you had not claimed it for all four years but your school had "awarded' you 4 years of credits, you still would not qualify.  Did you say you never got the credit previously when your parents claimed you as dependent?
  Also, when you were still in undergrad last spring, how much in scholarships did you receive?  Look at that.

I am having trouble with the education credits. I believe, as a grad student with income less than 7K and only a small $650 scholarship I qualify. Can someone explain?

I think I figured it out.  Thank you for your help!
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