Student health fee, transportation fee, AOTC and 529

The Health Services Fee and the Transportation Fee are not QEE for the AOTC. It’s probably a good bet that the school feels the Alumni Fee is also not a tax credit QEE, given that it was left off of the 1098-T.

From IRS Pub 970, page 17 (American Opportunity Credit):

Qualified education expenses don’t include amounts paid for:
• Insurance;
• Medical expenses (including student health fees);
• Room and board;
• Transportation; or
• Similar personal, living, or family expenses.
This is true even if the amount must be paid to the institution as a condition of enrollment or attendance.

The 529 Chapter in Pub 970 does not have this same kind of language relating to specific expenses that do not qualify as QEE, but I think the smart move here is to also apply this guidance to 529s, unless the expenses are explicitly allowed as QEE for 529s, such as room and board for students who are enrolled at least half-time.