Hal_Al
Level 15

Education

Sorry, this is actually simple.  Only 40% of the AOTC is refundable.  If you have 0 tax liability (lines 16 & 18 on form 1040), you do not get the other 60% (nothing on line 20).  So entering $2000 gets you $800 and $4000 only gets you $1000. 

 

This thread has gotten long, and I though we had previously established that you were eligible for  both pieces.  Apparently not. 

 

Entering $2000, rather than $4000, is best as your student will pay more than you get.