Why am I not qualified for educational tax breaks?

[yunji127]

I didn't include form 1098-T when I was filing my tax return for 2023, so I was trying to amend my tax return.

However, it said that I am not qualified for LLC for the following reasons: 

- Somebody else can claim claim you as a dependent on their return

- There is no taxable income in your return

- Scholarships, grants, and other tax free assistance exceed the education expenses

- There were no net qualified education expenses

The thing is, I just completed my 2024 tax return and I was eligible, and the reasons above does not apply to my situation. I also double checked with the IRS website (questionnaire for checking eligibility) and they also stated that I would be eligible for LLC. 

I was hoping for more guidance from tax experts on how to resolve this situation, or if there would be any other reasons why I'm not qualifying. 

[KrisD15]

The difference (between being eligible in 2024 but not for 2023) could be because of what's on the 2023 Form 1098-T.

What is in Box 1 and Box 5 of the 1098-T?

Did/do you have a tax liability for tax year 2023?

Did you file as a non-dependent taxpayer in 2023?

[yunji127]

Box 1 says $40,920.00 and box 5 says $8000.00. 

I filed as a non-dependent taxpayer (meaning no one claimed me as a dependent) and I did not have tax liability in 2023.

[KrisD15]

If you don't have a tax liability, the Lifetime Learning Credit is useless, it would not be generated since it would not be used. 

The Lifetime Learning Credit is non-refundable, so once your tax liability is zero-ed out, there is no more credit. 

If there is no tax liability to begin with, the credit is not generated.

The American Opportunity Tax Credit is refundable. If you were eligible for that credit, once your tax liability was zero-ed out, the remaining credit would become part of your refund. 

The American Opportunity Tax Credit has more requirements, such as being an under-grad and is only allowed to be used four times per student. 

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