Lifetime Learning Credit without 1098-T

[MayB42]

My dependent's final semester in college was Jan 2020-May 2020. The college billed us in 2019 and completed the 2019 1098-T reporting the billed amounts in Box 1, with Box 2 blank, and a check mark in Box 7. So they did not send us a 1098-T for 2020. We paid a portion of the tuition in 2019 and a portion in 2020. We have already taken 4 years of the American Opportunity Credit. Can we take the Lifetime Learning Credit in 2020 without receiving a 1098-T? If we do, will we get audited? Turbo Tax is requiring that the 2019 1098-T have an amount in Box 2, however, the form instructions do not mention that requirement, only that Box 7 was checked for 2019. If we can take the Lifetime Learning Credit in 2020, how do we enter that in Turbo Tax?

[AmyC]

Yes, you can take the lifetime credit.

No, that does not increase your risk of audit.

If you paid a portion in 2020, it seems like you would have a 1098-T for 2020. 

In the search box, type in lifetime and then select lifetime learning credit and click on jump to lifetime learning credit.

When asked if you have a 1098-T, say no. Do you qualify for an exception, yes. Continue filling in information.

The Lifetime Learning credit,

• Is worth up to $2,000 (the credit is actually worth 20 percent of the first $10,000 of qualifying costs.)
• The income phase-out zone is lower than for the American Opportunity credit.
• For 2020, the Lifetime Learning credit gradually disappears as AGI rises from $59,000 to $69,000 on single returns and from $118,000 to $138,000 on joint returns.

IRS publication 970 has more information about the American Opportunity, Hope and Lifetime Learning tax credits.

[Hal_Al · Accepted solution]

Q.  Can we take the Lifetime Learning Credit in 2020 without receiving a 1098-T?

A. Yes

Q. If we do, will we get audited?

A. No

Q. Turbo Tax is requiring that the 2019 1098-T have an amount in Box 2, however, the form instructions do not mention that requirement, only that Box 7 was checked for 2019.

A. Answer yes to the box 2 question.  It's the only way to get TT to give you the box 7 question.

Q. If we can take the Lifetime Learning Credit in 2020, how do we enter that in Turbo Tax?

A. Follow the education interview.  In particular, answer yes when asked if you have an exception to not getting a 1098-T

[MayB42]

I think I did not get a 1098-T for 2020 because I used the school's billing arrangement. I paid their billing service monthly payments Aug 19- March 20, but they reported the entire tuition in Box 1 in 2019. I think this billing arrangement qualifies for an exception to the 1098-T. Do you agree?

[Hal_Al]

Q.  I think this billing arrangement qualifies for an exception to the 1098-T. Do you agree?

A.  Yes.

The fact that box 7 was checked on the 2019 1098-T constitutes an exception for not having a 2020 1098-T.