Should I be getting a refund for Lifetime Learning Credit?

It depends. It may be that you have made a selection in your return that makes TurboTax think you are eligible for the American Opportunity Credit (AOTC) which could be increasing your refund in error.

• What Education tax credits are available? (Deductions and Credits > Education > 1098-T, or your form)

If you are unsure, you can take the following actions. If you would like to send us a “diagnostic” file that has your “numbers” but not your personal information it would help.  If you would like to do this, here are the instructions:  (Don't forget to give us the state)

 

TurboTax Online:

Open your return -Go to the menu panel on the left side of your return and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number. 
5. Reply to this thread with your Token number and your state. This will allow us to open a copy of your return without seeing any personal information.  

TurboTax Desktop:

If you like, you can send a copy of your return that will be scrubbed to eliminate your personal data by using these steps:

1. Click on Online in the top left menu of TurboTax CD/Download for Windows
2. Select 'Send Tax File to Agent'
3. Write down or send an image of your token number and state then place in this issue.
4. We can then review your exact scenario for a solution.
5. Please also tell us any states included in the return. This is necessary for us to view the return.

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution. 

Thank you! 1292810, IN.

Great news. When reviewing your details, you are allowed the Lifetime Learning Credit (LLC) which is being applied accurately. Your tax liability before the credit is higher than the allowed credit. If you spend at lease $10,000 on higher education, and if you have already used the American Opportunity Tax Credit (AOTC) in the first four years of qualified education, then you are allowed the following maximum credit.

 

Lifetime Learning Credit (LLC)

• The amount of the credit is 20 percent of the first $10,000 of qualified education expenses or a maximum of $2,000 per return. The LLC is not refundable. So, you can use the credit to pay any tax you owe but you won’t receive any of the credit back as a refund.

This credit is allowed to reduce your tax dollar for dollar up to the amount of tax liability. 

Thank you! So to clarify, the amount that I'm receiving in a refund is accurate because of the way that the LLC tax credit reduces my taxes, thereby providing me with a much higher refund, correct?

That is correct.   The credit is non-refundable but you still have a tax liability after applying the credit, so you can take advantage of the full credit.  🙂