Turbo tax is telling me I don't get the American Opportunity credit but I am only in my 4th year of college and I was under the impression I should get it

[Phillip1 · Accepted solution]

Without having the ability to access your information, I can think of a couple of common reasons why you may, unexpectedly, not qualify for the American Opportunity Tax Credit.

One of the biggest issues for many students, is that their parents are claiming them as dependents. Under IRS rules, the American Opportunity Tax Credit is attached to the student’s exemption. If you are filing for yourself, you can claim the exemption - otherwise you cannot claim the credit. Technically, parents or guardians are often able to claim student children until they are the age of 24 years old if the student is unmarried. If this is the case, and you marked that "someone else can claim me as a dependent" TurboTax will show that you do not qualify for the tax credit. I recommend reviewing these rules (Pub 501 regarding Dependents) to make sure whether you or your parents can claim your tax exemption.

Another issue that commonly prevents students from claiming the credit is that they have received more money in scholarships and grants (listed on the form 1098-T from your school) than qualified education expenses (including expenses listed on this IRS site and tuition and fees listed on the form 1098-T from your school). Make sure you have included other education expenses like books,supplies and equipment in the expenses that you have included in TurboTax.

If you are now in graduate school, that may be another reason that you are not qualifying for the credit.

Here is a full list of all qualifications for the American Opportunity Credit. If the above paragraphs do not describe your situation, you may not qualify because of any of these other items:

1. The student must be you, your spouse, or a child whom you claim as a dependent on your tax return.
2. The credit can only be claimed for the first four years of post-secondary education.
3. The student must be pursuing a degree, certificate, or other recognized credential at an Eligible Educational Institution.
4. The credit is only available for four tax years.
5. The student must be enrolled at least half-time for a minimum of one academic period during the tax year.
6. The academic period must begin either during 2016 or during the first three months of 2017.
7. You must pay the expenses during 2016 or during the first three months of 2014.
8. You can pay expenses with a loan, including low-interest student and government subsidized loans, but be sure to deduct the expenses rather than the loan payments.

1. Qualified education expenses include tuition and "course materials." For this purpose, the term "course materials" means books, supplies, and equipment needed for a course of study whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance.

1. Courses must be taken at an eligible educational institution. Check with your school to see if they are eligible to participate in a student aid program administered by the Department of Education.
2. You can't claim the credit if you are claimed as a dependent on your parent's (or someone else's return). This credit is attached to the student's exemption. If you are filing for yourself, you can claim the credit - otherwise you can not.
3. You cannot claim the credit if you are filing using the married filing separate filing status.
4. Your Modified AGI (income) should be under 90,000 dollars, or under 180,000 dollars if you are filing as married filing jointly.

[mckeonfam]

i met all and still tells me I don't qualify

[maglib]

are you claiming yourself or is your parents claiming you? Only the person claiming the student benefit from the education credits.  Did you enter all your expenses for college?  Did you have a 1099Q possibly?  As @TurboTaxPhillip  said, we can not see your return so you would have to post details as to who is claiming you, the amounts you had as education expenses, scholarships, 1099-Q's and your income for us to help you further.

[ryan1redsox]

claiming myself - no 1099q

[maglib]

you may want to go bath through the personal info section.  There is a question on if you provided over half your support from earned income, the questions on can anyone else claim you.. Also go back through 1098-t interview and ensure you said you were attending school at least half time..

[neblood97531]

Having a similar problem this year, I qualify and am claiming myself. I supported myself this year and my mother didn't claim me. Confused as to why I am not qualifying.

[neblood97531]

@TurboTaxPhillip

[info28]

There is a bug in the logic.  I met all the qualifications for the American Opportunity Credit, yet Turbotax said that I didn't qualify for this credit.  One of the items to qualify for the American Opportunity Credit is that you need to be at least Half time Student.

One of the questions in TurboTax is: Where you at lest half time student?  The the options are 1) Full Time 2) Half Time and 3) Less than half time.  

Being a full time student, I selected option 1) full time; and TurboTax told me I didn't qualify for the credit.  I reviewed my answer to 2) Half Time and TurboTax told me that I did qualify.

Since Full time student is more than Half time and the requirement is to be at least half time; both answers, Half time and Full time should qualify for this credit (assuming that the other requirements are met).

[wildbeest55]

Turbo tax needs to change their system for the american opportunity credit. I selected full time student and it told me I didn't qualify. I went back and selected half time and now I do.

[neblood97531]

Tried that, still not working on my end.

[pmoustakas]

Change the number of years you use this credit to 1 year and then it works.   There is a bug and I spent 6 hours to fix it.  really bad product and expensive.  

[ChrisA75]

Where do I add additional qualified expenses. TurboTax is telling me I can only include the amount from box 1 of the 1098-T, but I have additional costs for books and computer. Where do I put those? There's also this https://turbotax.intuit.com/tax-tips/college-and-education/deduction-for-higher-education/L0krerdUK

there seems to be an error, as it claims you cannot deduct books and equipment unless it's paid directly to the university.

Help!

[AnnetteB6]

To enter your other education expenses and your Form 1098-T, use the following steps shown below.  Go all the way through the section until you have entered your Form 1098-T and then you can select the different categories of education expenses to enter your additional qualified expenses.

Also, the article you referenced is discussing the Tuition and Fees Deduction, not the American Opportunity Tax Credit or the Lifetime Learning Credit.  They each have their own requirements for qualified expenses, including requiring books be purchased through the school in some cases.  After you have entered all of your information, TurboTax will determine which education tax benefit is best for your situation.

Start by going to the Education section of your return using these 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 “education” (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 education”
• Click on the blue “Jump to education” link

Then, if you are not prompted to enter your 1098-T, go through the entire education expenses section (without entering any information yet) of your return until you reach the screen titled “Your Education Expenses Summary”, then follow these steps:

• Click Edit next to the student name.
• On the screen titled “Here’s your Education Summary”, click Edit beside Tuition.
• Enter the information from your Form 1098-T.

@ChrisA75

[droodhall]

I believe Turbotax gave $1,000 American Opportunity Credit because the 22 y/o full time student had $8,900 in Earned Income and was filing single with no one else claiming him as dependent.  So, the $8,900 in income must be considered more than half of his total support.  My question:  how does Turbotax determine what this student's total support is??