Get your taxes done using TurboTax

Your modified adjusted gross income (MAGI) is too high or you have something entered incorrectly in the Education section.   The threshold kicks in when your MAGI hits $160K (for joint returns).  To calculate your modified adjusted gross income, take your AGI and "add-back" certain deductions.   Your AGI is found on Line 11 of Form 1040 and the add-backs are listed in this link.   If your MAGI is below the threshold, go back through the Education section, carefully reviewing your answers.   Also, if MAGI is within range, see below to see how to use the Education Optimizer (letme function) - you might want to start here.   Sometimes it is something simple like you accidentally marked that one student was convicted of a felony or did not attend at least half-time.  

Qualifications for claiming the American Opportunity Tax Credit are:

• You paid an eligible student's qualified education expenses for higher education at any college, university, or vocational school with a student aid program administered by the US Department of Education.
• The eligible student is you, your spouse, or a dependent on your return.
• For the full credit, your MAGI (modified adjusted gross income) is less than $90,000 ($180,000 if you're filing jointly).
  • For a reduced credit, your MAGI is between $80,000 and $90,000 ($160,000 and $180,000 if you're filing jointly).

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 or to see a summary of what and why you do or don't qualify, 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.