topic education tax credit in Education

education tax credit

Mwatkins — Mon, 13 Jul 2020 15:44:58 GMT

My son was a high school senior and took several courses at a Technical college while still in high school and received a grant. Turbo Tax wants to give me a American Tax credit, however, can i choose not to use it so he can use the credits once he starts his 4 year degree since it is limited to only 1 per year? I have tried take it out of turbo tax but i cannot.

Re: education tax credit

Hal_Al — Mon, 13 Jul 2020 15:57:18 GMT

Yes, you can and should do that.

Type> letme <in the search box to get to the screen to change the credit/ deduction.

You say he received a grant. You can only claim a deduction or credit for the amount of expenses exceeding the grant (essentially the amount that box 1 of the 1098-T exceeds box 5)

Re: education tax credit

Mwatkins — Mon, 13 Jul 2020 16:07:04 GMT

I am required to enter the grant amount and Turbo Tax is including on Tax return and giving me a education tax credit still. However, since you only allowed to take one each of the four years I would rather not use it now since he was only at the technical college part time. I would rather use credit once he is at a four year school. How can not use credit TT is putting on return.

Re: education tax credit

Hal_Al — Mon, 13 Jul 2020 16:41:58 GMT

The American Opportunity Credit (AOC) is the only one limited to 4 years.

You may still claim the Lifetime Learning Credit (LLC) or the Tuition and Fees deduction (TFD) and save the more generous AOC for later. When comparing the LLC and TFD amounts, remember the LLC is a credit and the TFD only a deduction.

You say "I am required to enter the grant amount". That is not usually the case. If the grant was used for post secondary tuition, it is not taxable. On the other hand, tuition paid for with tax free grants is not eligible to claim the tuition credit or deduction.

How was the grant reported? On a 1098-T or 1099-Misc or something else?