I was a full-time student in 2022 and received 1099-NEC for the internship which is required for my degree completion, earning ~20K. I got only $400 deduction from tax from the lifetime learning credit even though the amount I paid in tuition normally should give me a $2K credit. I didn't even know I'm not an employee and had to withhold tax for self-employment tax. Is there anything I can do to apply the education credit to this income since my program required an internship for degree completion?
Yes, you can review What self-employed expenses can I deduct? for additional "ordinary and necessary" business expenses you can use to reduce your internship income. The credit reduction you are experiencing is due to your income level reported that is reducing the credit available.
Once you have determined the expenses you can deduction you can follow these steps to enter them in TurboTax Online: