Add amounts paid for these materials to Form 8863 to your other adjusted qualified education expenses. You do not have to buy the materials from the eligible educational institution. For the AOTC but not the LLC, qualified tuition and related expenses include amounts paid for books, supplies and equipment needed for a course of study. What additional education expenses qualify for the AOTC, but not the LLC?Ī6. Same expenses used for any other tax deduction, credit or educational benefit.Same expenses paid with tax-free educational assistance.Student fees, unless required as a condition of enrollment or attendance.The following expenses do not qualify for the AOTC or the LLC: The expenses paid during the tax year must be for an academic period that begins in the same tax year or an academic period that begins in the first three months of the following tax year. In general, qualified tuition and related expenses for the education tax credits include tuition and required fees for the enrollment or attendance at eligible post-secondary educational institutions (including colleges, universities and trade schools). What are qualified tuition and related expenses for the education tax credits?Ī5. If the amount of the AOTC is more than the tax you owe, then up to 40 percent of the credit (up to $1,000) can be refunded to you. You reduce the amount of tax you owe dollar for dollar by the amount of the AOTC for which you qualify up to the amount of tax you owe. Also, 40 percent of the credit for which you qualify that is more than the tax you owe (up to $1,000) can be refunded to you. It is a tax credit of up to $2,500 of the cost of tuition, certain required fees and course materials needed for attendance and paid during the tax year. See Education Credits: AOTC and LLC for more information. It also differs because you can claim the credit for four tax years instead of no limit on the number of years you can claim the LLC. Unlike the other education tax credits, the AOTC is allowed for expenses for course-related books, supplies and equipment that are not necessarily paid to the educational institution but are needed for attendance. How does AOTC differ from the existing LLC?Ī2. To be eligible to claim the AOTC or the LLC, this law requires a taxpayer (or a dependent) to have received Form 1098-T, Tuition Statement, from an eligible educational institution. In addition, the Trade Preferences Extension Act 2015 requires most students to have received a Form 1098-T. Additionally, if you claim the AOTC, this law requires you to include the school’s Employer Identification Number on this form. To claim the AOTC or LLC, use Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits). The AOTC helps defray the cost of higher education expenses for tuition, certain fees and course materials for four years. No, but the Protecting Americans Against Tax Hikes (PATH) Act of 2015 made AOTC permanent. Have there been any changes in the past few years to the tax credits for higher education expenses?Ī1. Find the answers to the most common questions you ask about the Education Credits - the American opportunity tax credit (AOTC) and the lifetime learning credit (LLC).
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