My son Has only taken 4 years of college but it is spread over 5 tax years. This is because the first and last semesters only cover a half semester which is typical when you start college in the fall after high school.
how do I still claim the AOTC credit when you can only take it for 4 years? Can I apply his spring 2021 tuition to the 2020 tax year since it occurred in the first 3 months even if it isn’t reported on the 2020 1098T?
You can claim the AOTC for four tax years, only.
It depends, when you paid those expenses. If you paid the expenses for spring 2021 in 2020 then yes, you can claim them on your 2020 tax return. Qualified education expenses are claimed in the tax year they are paid. It does not matter what year they pay "for".
It would be best to check the financial statement from College how much you paid in 2020 and compare it with the 1098-T.
"Generally, the credit is allowed for adjusted qualified education expenses paid in 2020 for an academic period beginning in 2020 or beginning in the first 3 months of 2021 (box 7 would be checked on the Form T-1098). For example, if you paid $1,500 in December 2020 for qualified tuition for the spring 2021 semester beginning January 2021, you can use that $1,500 in figuring your 2020 credit." (IRS Pub 970)
To be eligible for AOTC, the student must:
- Be pursuing a degree or other recognized education credential
- Be enrolled at least half time for at least one academic period* beginning in the tax year
- Not have finished the first four years of higher education at the beginning of the tax year
- Not have claimed the AOTC or the former Hope credit for more than four tax years
- Not have a felony drug conviction at the end of the tax year
Please see What education tax credits are available? for additional information.
[Edited 1/31/2021 | 6:04am PST]
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You seem to be asking, how can you claim the AOTC a 5th time.
For the 5th year, you can claim the Lifetime Learning Credit (LLC) instead. Alternatively there's the Tuition and Fees deduction (TFD). Most people come out better with the LLC.
As to your specific question: Can I apply his spring 2021 tuition to the 2020 tax year since it occurred in the first 3 months even if it isn’t reported on the 2020 1098T? Yes, but only if you actually paid it in 2020. It only takes $4000 of total expenses to get the maximum AOTC. Most people come out better saving some of those expenses for the LLC in 2021.