Does withdrawals from a 401K count as income when figuring whether you qualify of an educational credit?

[MinhT]

Yes, withdrawals from a 401(k) are taxable and do count as income to determine whether you are or not above the MAGI limit for education credits.

MAGI for most people is the amount of AGI, adjusted gross income, shown on your tax return. On Form 1040A, AGI is on line 22 and is the same as MAGI. If you file Form 1040, AGI is on line 38 and you add back the following:

• Foreign earned income exclusion,
• Foreign housing exclusion,
• Foreign housing deduction,
• Income excluded as bona fide residents of American Samoa or of Puerto Rico.

[sonhawks79]

I finished doing my 2020 taxes on Turbo tax Deluxe and was had put in information for 2 of my kids tuition 1098-T statements where I had paid over $2000 for each and was trying to get credit for the American Opportunity Tax Credit and it only gave me $500 for each instead of $2000 each. My AGI was $146000 which is under the $160000 mark to get full credit but apparently it added things to the AGI to make the MAGI like $175000. My question is where the additions came from??? I read the possible things that could be added back to make the MAGI and I didn't have any of those items listed.  I just want some clarification on why the MAGI is like $30000 higher than my AGI??

[MarilynG1]

Your MAGI is basically your Taxable Income before any Credits (Form 1040, Line 9).

Your AGI is your income after Credits from Schedule 1 are subtracted from MAGI (Form 1040, Line 11).

Click this link for more info on Difference between AGI and MAGI. 

You can View/Save/Print your return to review the forms and worksheets, since we can't see your return in this forum.

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