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Paul90
Returning Member

I received a 1098-T, but am I able to claim a credit for education expenses if reimbursed by state prepaid plan?

 
3 Replies
Coleen3
Intuit Alumni

I received a 1098-T, but am I able to claim a credit for education expenses if reimbursed by state prepaid plan?

Unfortnately, no. The prepaid plan is paying for the tuition, not you.

However, an American opportunity or lifetime learning credit (education credit) can be claimed in the same year the beneficiary takes a tax-free distribution from a QTP, as long as the same expenses aren't used for both benefits. This means that after the beneficiary reduces qualified education expenses by tax-free educational assistance, he or she must further reduce them by the expenses taken into account in determining the credit. 

Paul90
Returning Member

I received a 1098-T, but am I able to claim a credit for education expenses if reimbursed by state prepaid plan?

Thank you for the prompt response, but it is still not clear for me and I probably left out some pertinent information.  Can you clarify what "both benefits" pertains to?  Additional info - the 1098-T is my daughter's, but since she is our dependent it is entered on my return.  We contributed to a Florida Prepaid Program when she was a child and are now drawing down on that to pay her expenses.  I thought we could still claim one of the credits you mentioned above.  
Coleen3
Intuit Alumni

I received a 1098-T, but am I able to claim a credit for education expenses if reimbursed by state prepaid plan?

You can't claim an education credit on tuition paid for by Fla Prepaid. If there was any tuition not covered by FPP, you can take a credit on that amount.
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