Tuition Credit vs Deduction

[GM56]

TTax is defaulting my tuition expenses as a Deduction, but I want to use the American Opportunity Credit. What question is triggering this decision by TTax? Could it be that my total income is less than my tuition expenses?

[CatinaT1]

Are you sure you are eligible for the American Opportunity Credit?  If so, review your answers carefully to ensure you answered everything correctly.

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

*Academic Period can be semesters, trimesters, quarters or any other period of study such as a summer school session. The schools determine the academic periods. For schools that use clock or credit hours and do not have academic terms, the payment period may be treated as an academic period.

More information can be found here:

Education Credits

American Opportunity Credit

[GM56]

Thanks for the response. The answer is yes to all of the qualifications. I'm curious because TTax is telling me it has determined that the Deduction saves me more money. With the Standard Deduction of $12K, I'm getting 100% of my fed tax refunded. So the Deduction isn't helping at all. Per pub 970, up to 40% of the credit is refundable, so I was thinking that the Credit would be more benefit.  What am I missing?

[NCperson]

what you are missing is that the 40% assumes you are otherwise paying taxes and the credit can reduce what you owe