Once you have entered all qualified education expenses and the education savings account withdrawal to pay for your child's education, you can allocate the expenses how you choose to maximize the tax benefits. To play with the amount that TurboTax allocates to the American Opportunity Tax Credit in TurboTax Online:
- Select Start/Revisit next to Federal > Deductions & Credits > Education > Expenses and Scholarships (1098-T)
- Select Edit next to the student's name.
- Select Edit next to Education Information.
- Confirm the information that determines the student's eligibility for any education credits.
- You will come to a screen Choosing a larger education credit. You can select any amount between 0 and 4000 to allocate to the American Opportunity Tax Credit and see the impact it has on your refund.
If you did not enter the information correctly that would qualify the student for the American Opportunity Credit, you may not have seen that screen. Make sure you answer they are working on a degree, at least half-time or full-time student, they have not completed four years of college, they have not received an education credit for more than three years, and they have not been convicted of a felony drug offense.
