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Why am I not getting the American Opportunity Tax Credit

SW6191SW6191 Registered User Posts: 15 New Member
So confused, any help would be appreciated!

I thought that the first 2000.00 of what you paid in QEE was given as the credit. This is what I have on our 1098-T

Line 2, amount billed 15,488
Line 5, Scholarships 11,704

We paid over 8,000 to the college this year (plus my daughters loans) however I only put that we paid 3784, which is the difference between the billed amount and scholarship, we are not claiming the scholarship as income so the 3784 is what is left over in QEE. When I put this amount in the tax software as paid education expenses, it gives us no education credits.

We do meet all the requirements to take the credit and we fall within the income range to take the credit as well.

Am I missing something here?? Please say yes!!


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Replies to: Why am I not getting the American Opportunity Tax Credit

  • 4kidsdad4kidsdad Registered User Posts: 4,602 Senior Member
    Your AGI too high?
    What are the income limits for AOTC?
    To claim the full credit, your MAGI,♦ modified adjusted gross income must be $80,000 or less ($160,000 or less for married filing jointly).
    You receive a reduced amount of the credit if your MAGI is over $80,000 but less than $90,000 (over $160,000 but less than $180,000 for married filing jointly).
    You cannot claim the credit if your MAGI is over $90,000 ($180,000 for joint filers).

    ♦MAGI for most people is the amount of AGI, adjusted gross income, shown on your tax return. On Form 1040A, AGI is on line 22 and is the same as MAGI.
    If you file Form 1040, you add the following amounts to AGI (line 38):
    Foreign earned income exclusion,
    Foreign housing exclusion,
    Foreign housing deduction,
    Exclusion of income by bona fide residents of American Samoa, or of Puerto Rico.

    If you need to adjust your AGI to find your MAGI, there are worksheets in the Publication 970 to help you.
  • mommdcmommdc Registered User Posts: 11,195 Senior Member
    Are you entering the numbers the way the software asks? Box 2, Box 5. In the parent return?
  • 4kidsdad4kidsdad Registered User Posts: 4,602 Senior Member
    Or

    Did you answer the questions in Form 8863 correctly?
  • SW6191SW6191 Registered User Posts: 15 New Member
    Hi yes. We fall well below the 160,00 income and I have checked and rechecked all the answers and boxes.

    Just playing around with it, I have to put in over 14,000 for the credit to kick in?? So confused.
  • SW6191SW6191 Registered User Posts: 15 New Member
    When I answer all the questions, it says we qualify for all the credits, but when I put in the expenses paid (3784) that is when it knocks us out of getting the credit.
  • mommdcmommdc Registered User Posts: 11,195 Senior Member
    Where are you entering expenses paid? The credit should be figured already from the answers to what is in box 2 and 5. The only other thing I remember entering where book expenses.
  • SW6191SW6191 Registered User Posts: 15 New Member
    The form does not list expenses paid, The only info on the 1098T is on line 2 and 5. After I enter that on the tax form it asks for Tuition and fees not on the 1098T that is where I am putting it , then a separate line for books
  • mommdcmommdc Registered User Posts: 11,195 Senior Member
    But the tuition and fees is on the 1098T, in box 2
  • mommdcmommdc Registered User Posts: 11,195 Senior Member
    Does box 2 not match what you paid in 2015 for tuition and fees?
  • 4kidsdad4kidsdad Registered User Posts: 4,602 Senior Member
    Box 2 is the billed expenses. Most software will ask for actual expenses paid which are the amount of what you paid and the posted scholarships. In your case, it should be 3784 + 11704 = 15488
  • SW6191SW6191 Registered User Posts: 15 New Member
    Yes, box 2 is billed expenses. Which is 15488.

    Thank you all for helping.

    Thanks, 4kidsdad, but I since I didn't pay the scholarship I'm not sure why I would add that in to expenses paid, I though it was expenses payed by me? I paid out of pocket over 8000 plus my D loans but some of that was for room and board, this is why I only put 3748, which was the difference between billed ecpenses and the scholarship. I hope I am wrong but I don't understand.

  • twoinanddonetwoinanddone Registered User Posts: 21,545 Senior Member
    The billed expenses in box 2 do not include r&b and some fees that might not qualify for QEE. If you agree with that number, that that is the amount you paid for tuition and QEE billed by the school, use it. The other box is the amount of scholarships. It could be any number, $4000, $8350, $9999. It doesn't matter unless it is over the billed amount (that you accepted as correct). You paid $8000 (plus any loan amount, which is the same as cash) because some of that was used for r&b. You could have paid $2000, or $5000 or all $15488. It's not going to change the amount the school billed you, which is $15488. You didn't pay the school more than $15488 for tuition.

    If the tuition billed was $15488 and the scholarship was $15488, you wouldn't get any AOTC even though you paid the college $8000 because the IRS would assume the entire $8000 was for r & b, and that's not eligible for the AOTC.

    Look at your billing statement from the college. What was the tuition and fees, what was the total of scholarships? If the tuition was about $15,000 and there were some fees, and the scholarships were about $11000, you are doing it correctly on taxes by just entering those numbers (plus you can add in the books). Assume the $8000 went to $4000 in tuition and $4000 in r&b.
  • SW6191SW6191 Registered User Posts: 15 New Member
    Thank You! Starting to make a little more since. I looked at college bill for year. Tuition and fees do add up to 15488 and the scholarships are correct as well at 11704..

    Went back to Tax questions and it ask for total amount of tuition and fees paid. So I should put the amount paid by scholarship plus the amount left that we paid toward the total billed, 15488?? which would equal to exactly the total on line 2, amount billed? I know this is what 4kidsdad said as well but just want to make sure this is also what twoinanddone means in your above explanation.
  • mommdcmommdc Registered User Posts: 11,195 Senior Member
    Yes, if your billing statement agrees with the numbers then the total tuition and fees billed and paid in 2015 is the amount in box 2 and the scholarships received the amount in box 5. Subtract box 5 from box 2 and you get the portion you paid for tuition, the scholarship paid part of it but since it is for tuition and fees which is a qualified expense, the scholarship is not taxable.

    The only other qualified expense you have is books.
  • SW6191SW6191 Registered User Posts: 15 New Member
    After sleeping on it and getting my head screwed back on from working on taxes 8 hours yesterday I think I finally realize that me putting in the total amount paid in the tax software as 15488 . That the software is doing the math for me, subtracting the amount of the scholarship, that leaves the 3784 that we paid and adding books to that we are getting back the full 2500 credit. Whew....Thanks to everyone for the input it really helped! And please, correct me if I'm wrong!!
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