The Turbotax software gives you the education credit that increases your refund the most. The Tuition and Fees Deduction is a nonrefundable credit and the credit amount depends on your tax. For example, if your tax was $1,000 and you were in the 10% bracket, then your credit amount would be $100. So this type of credit does not directly increase your refund amount. The American Opportunity Credit is a partially refundable credit. Up to $1,000 of this credit directly increases your refund amount and the other $1,500 reduces your tax. It sounds as if you qualified for the maximum amount of education credit available. Please view the TurboTax FAQ as it explains the Tuition and. Fees deduction. This IRS link also breaks down the benefits of the American Opportunity credit.
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