American Opportunity Credit

[FlatfootJRL]

I am trying to take advantage of the American Opportunity Credit as I have done last year.  We have inputted $6000 less in box 5 than what we have in box 1 of the 1098-T.  Our income is $160 K (married filing jointly), so I understand we may not be able to get the full amount.  Turbotax, however, is claiming that we are not eligible for any amount stating it could be one of these reasons:

 * your income exceeds the maximum limit

*  somebody else can claim you as a dependent on their return

* scholarships, grants, and other tax free assistance exceeds the education expenses

* there were no net qualified education expenses

None of these apply for us.  What could be the problem?

[MindyB]

Can you clarify if the $160k income you mentioned is taxable income or AGI? The limit for married filing jointly is $180k of MAGI.

The education credits are limited using AGI as a starting point, not taxable income.  The education credits are based on modified adjusted income ("MAGI"), which starts with Line 11, AGI, and has several modifications. Here is the chart to figure MAGI for the American Opportunity Credit: Worksheet 2-1. MAGI for the American Opportunity Credit