Not sure why I am not eligible to take the tuition credit after I filled 1098 T

[Yunguang]

Hi There,

1098 T

Box1: 70,667.

Box5: 44,352.

My MAGI:$176,924

I think I should be eligible for this, but why?

Here is what I got:

"

You can't claim an education tax break

Based on what you've entered so far you are not eligible for an education credit.

Here is why you may not qualify:

Your income exceeds the maximum limit   Somebody else can claim you as a dependent on their return   Scholarships, grants, and other tax free assistance exceed the education expenses   There were no net qualified education expenses

"

[MindyB]

I would like to take a deeper look at this. However, I need a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following the directions below:

TurboTax Online:

1. Sign into your online account.
2. Locate the Tax Tools on the left-hand side of the screen.
3. A drop-down will appear. Select Tools
4. On the pop-up screen, click on “Share my file with agent.”
5. This will generate a message that a diagnostic file gets sanitized and transmitted to us.
6. Please provide the Token Number that was generated in the response.

TurboTax Desktop:
If you like, you can send a copy of your return that will be scrubbed to eliminate your personal data by using these steps:
 

1. Click on Online in the top left menu of TurboTax Desktop for Windows
2. Select 'Send Tax File to Agent'* > Follow the prompts to reach the token number.
   • Enter your email used for TurboTax > Enter your code > Send
3. Write down or send an image of your token number and state then place in this issue.
4. We can then review your exact scenario for a solution.
5. Please also tell us any states included in the return. This is necessary for us to view the return.
   • *If using a MAC, go to the menu at the top of the screen, select Help, then, 'Send Tax File to Agent')

[Yunguang]

Thank you, however, I was not able to locate "tax tools"

[MindyB]

It looks like you may have gotten signed out- choose to pick up where you left off, or pick any category, Wages and Income for example, to get back into TurboTax Online and see the full menu.

[Yunguang]

thank you, I was able to share the file, but I don't see any file generated or downloaded. Did it send to Turbotax directly?

The token number is 1300789

[Hal_Al]

There is a phase out of the tax credit when your MAGI is between $160K nd $180K.  At your MAGI, you're only going to get $385 of the $2500 AOTC or  $308 of the $2000 LLC. 

[MindyB]

Thank you, the token allowed me to view your scrubbed return.  I confirmed you are not receiving any education credits.  

Unfortunately (for this purpose), your MAGI is quite a bit higher than $177k (that's taxable income, not MAGI).  Since your income exceeds $180k, that is why the credit is not allowed.  

The education credits are limited using AGI as a starting point, not taxable income.  The education credits are based on modified adjusted income ("MAGI"), which starts with Line 11, AGI, and has several modifications. Here is the chart to figure MAGI for the American Opportunity Credit: Worksheet 2-1. MAGI for the American Opportunity Credit

[Yunguang]

Thanks,

But the TurboTax online version says I am not eligible. So I can't enter this into my tax return.

[MindyB]

Correct, you are not eligible.  Your MAGI is too high.  You mistakenly computed MAGI using taxable income (after standard deduction) instead of AGI (before standard deduction).

[Yunguang]

Thank you!

Another question, if I am eligible in 2025, will I be able to claim it again? Does the 1098 T benefit have a limit dollar amount?

[Hal_Al]

The AOTC is 100% of the 1st $2000 of tuition and 25% of the 2nd $2000.

The LLC is 20% of tuition on up to $10K. 

[Yunguang]

Thank you!