Why would we not be eligible for the American Opportunity Credit? We entered the 1098-T.

[Hal_Al]

If you are eligible, you have answered  something wrong, in the interview. But, a lot of people are just not eligible.  Box 1 of the 1098-T must be more than box 5. 

Rules:  https://www.irs.gov/Individuals/AOTC

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. 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.

Reference: Line 7 instructions for form 8863. https://www.irs.gov/instructions/i8863

See Also see this TT FAQ https://ttlc.intuit.com/questions/3383321-why-didn-t-i-get-a-credit-or-deduction-for-education-expen...

[matkat518]

Thank you for your reply.  I'm not sure what interview you mean.  Only Box 1 is populated.  We paid the full tuition out of pocket.   Our son is 19, and a full-time college student.

[Hal_Al]

If you are eligible, you have answered  something wrong, in the interview.

Delete the info and re-enter. Go through the entire education interview until you reach a screen titled "Your Education Expenses Summary".  Click delete next to the student's name.  You'll then get the "Your Education Expenses Summary" screen again.  Click the "Add a student" button.

Your son must have been previously entered as your dependent, in the personal info section.

[LeticiaF1]

The interview that Hal_AI mentioned, is just the way TurboTax asks questions as it guides you during your tax return preparation.  The program uses those answers to determine what credits you are eligible for.  If you are having difficulties with the education credits, it could be that you answered one of those questions incorrectly.  You should go back to your Form 1098-T, and go through those questions again, to verify that everything is correct.  To go back follow the steps below:

1. Open or continue your return.
2. Select Search and enter Form 1098-T.
3. Select Jump to form 1098-t.
4. Continue through the interview and check all your answers.

There are two different education credits that you may be eligible to claim, the Lifetime Learning credit and the American Opportunity credit.  Both of them have different requirements, so the questions the program asks are to determine what credit you could claim.  

Some things that could be disqualifying you could be your income.  Both credits have Modified adjusted gross income (MAGI) limits, your MAGI should be below $90,000 or $180,000 if Married Filing Jointly. When you are entering the information make sure you enter all your expenses like books and required supplies.  Double-check your entries in Box 1 and Box 5 on your 1098-T.  

For more information on the credits see the TurboTax help article What education tax credits are available?

@matkat518 

[Edited 4/3/24 | 8:07AM PST ]

[matkat518]

Thank you for your response.  I went back and completely deleted the 1098-T, and added the information again from scratch...with the same result: 

"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

There were no net qualified education expenses"

My understanding is that the maximum income is $180K, and we are below that.

Nobody else can claim our son as a dependent.

How can tuition not be a qualified education expense?

[Hal_Al]

There is a phase out between $160K and 180K income, married filing jointly.

Be sure the student qualifies as your dependent in the personal info section.

You cannot claim the credit if you're filing as Married filing separately.

At the 1098-T screen, be sure you entered the school's "Filer's federal ID no."

Otherwise, reply back, indicating how you answered each question in the interview.