Why no Lifelong Learning Credit?

[john20211]

In 2019, I paid more than $10,000 in eligible graduate school tuition and received a $2,000 Lifelong Learning Credit.

In 2020, I again paid more than $10,000 in eligible graduate school tuition. However, Turbotax says that I am only eligible for a $61 Lifelong Learning Credit. 

Any suggestions about what the problem is? Why am I not eligible for a $2000 credit again? Thanks very much.

[PattiF]

The Lifetime Learning Credit is a Non Refundable credit. That can only be applied against the tax that is owed.

[john20211]

Hi, thank you. However, I still owe tax, which is why I don't understand why I am not receiving the credit (up to the amount of my tax owed). 

[PattiF]

Was the credit phased-out because of your income?

[john20211]

Hi, thanks, but no that's not the issue either. I've read all the TurboTax documentation on the Lifelong Learning Credit and none of the qualifications apply to me. I specifically don't understand how TurboTax arrived at exactly $61 as the amount of my credit -- that's much lower than it should be, on my understanding of how the credit works.

[DawnC]

The easiest way to see how the credit was calculated and/or limited by your tax liability is to view Form 8863.   Line 19 is the total education credit that gets reported on Schedule 3.   

• Before claiming the Lifetime Learning credit, you should determine whether you qualify to take the American Opportunity credit.
• For most students who are in one of their first four years of post-secondary education, the American Opportunity credit can provide greater tax savings.
• The maximum amount for the American Opportunity credit is $2,500.

What Is the Lifetime Learning Tax Credit?

Generally speaking, the IRS only lets you take one education credit or deduction. If you qualify for two or more education credits or deductions, the TurboTax Education Optimizer picks the one that gives you the biggest tax break.   To override this selection, open your return, search for letme (one word, no space), and select the Jump to link. This will take you to the Education Credits and Deduction screen, where you can switch to a different education credit or deduction, assuming you meet the qualifications.   The optimizer will provide some more details on the education credit(s) that you qualify for.  

[john20211]

You write: "The easiest way to see how the credit was calculated and/or limited by your tax liability is to view Form 8863.   Line 19 is the total education credit that gets reported on Schedule 3. "

Yes, but how do I check this when using Turbo Tax? I cannot view my return until it's complete, so I'm unable to view Form 8863. So I don't understand how TurboTax figured out this amount.

Thanks, but I still don't understand why TurboTax is not giving me the full Lifelong Learning Credit.

[PattiF]

You must be using TurboTax Online. Forms view is available in the TurboTax Desktop/Download/ CD version. 

You can print out your return before you e-file. Here are instructions for that.