IRS says I should get 40 percent of any remaining amount of the AOC credit (up to $1,000) refunded if my tax owed is zero. Why does Turbot choose the Tuition Deduction?

[zsknee18]

IRS on American Oppty Credit - If the credit brings the amount of tax you owe to zero, you can have 40 percent of any remaining amount of the credit (up to $1,000) refunded to you.  Turbotax chooses Tuition Deduction as the best option, even though I should get a $1000 refund with the AOC.

[AnnetteB6]

Without knowing the details of your particular tax return, there is no way to know exactly why TurboTax determined that the Tuition and Fees Deduction is your best option.  

However, you can attempt to change the education tax benefit that is being chosen for you by TurboTax in order to see how another option would affect your return.  

Override the Education Optimizer and select the education tax benefit you want to claim by using the following steps:

• On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
• This opens a box where you can type in “letme” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
• The search results will give you an option to “Jump to letme”
• Click on the blue “Jump to letme” link 

See the following TurboTax article for more details if the steps above do not work: 

How do I override the TurboTax Education Optimizer selection?

[SweetieJean]

Are you still in the first 4 years of undergraduate study?

[Hal_Al]

There's a new urban myth among college students that says they can get a $1000 from the government just for filing a tax form. For most of them, they simply aren't eligible. A full time unmarried student, under age 24, even if you don't qualify as a dependent, is only eligible for the refundable portion of the American Opportunity Credit if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans or student loans & grants. You usually must have actually paid tuition, not had it paid by scholarships & grants.  It is usually best if the parent claims that credit. 

You cannot claim a credit if you are, or can be, claimed as a dependent by someone else.