American Opportunity Credit

[davidsadd1]

My first daughter is in her 3rd year of college.  Each of the two previous years, we've qualified for the American Opportunity Credit.  This year Turbo Tax is saying we don't qualify because "Net qualified education expenses is zero."  I don't think this is right.  Please help.  Below are the details for my first daughter.  Another consideration might be that I have a second daughter in college now.  She is qualified for the AOC.

• I'm the parent
• Box 1 of the 1098-T is $11,478
• Box 5 of the 1098-T is $8,717
• Box 1 of the 1099-Q $16,100
• Box 2 of the 1098-Q $3,229
• My name and SS# are on the 1099-Q (I'm the recipient)
• Room & board paid is $10,755
• Other qualified expenses not included in box 1 of the 1098-T, e.g. books & computers is $804

[ErnieS0]

Check your entries. Based on the information provided, it appears you have $2,761 that can be applied towards the American Opportunity Tax Credit,.

[davidsadd1]

Thanks ErnieS0.  I found that form.  Here's what it looks like.  The $804 was books.  The problem appears to be the $3,565.  Do you  have any idea what that might be?

[ErnieS0 · Accepted solution]

Education expenses may be used to exclude distributions from a qualified plan or to calculate a tax credit, but not both.

The program will show on line 18 the amounts applied against distributions.

TurboTax is showing that none education expenses were used for the education credit (line 17 in the first column is $0). Change this to $3,565.

[davidsadd1]

Thanks ErnieS0!  That made a big difference!

[jsedbe0624]

How do I get to this form?  I have been having trouble getting TTtax to calculate college expense issues correctly and this would help.

[MayaD]

Use Form 8863 to figure and claim your education credits, which are based on qualified education expenses paid to an eligible postsecondary educational institution. 

You can use the American Opportunity Tax Credit (AOTC) for the first four years of college when working towards a degree.

• Maximum credit is $2,500 per eligible student
• Must be enrolled at least half-time for at least one semester during the tax year at an eligible educational institution
• Up to $1,000 can be refunded to you

Education Credits 

When you report the 1098-T form and enter the education expenses in the education section, TurboTax will automatically generate form 8863.

To report form 1098-T:

• Login to your return.
• Select Federal from the left menu.
• Go to Deductions and Credits.
• Scroll down to Education.
• Click start next to Expenses and Scholarships (Form 1098-T)