a couple of education tax credit questions

Paying for College
1

<p>Can someone who knows more about the subject of Fed ed tax credits comment on the following breakdown of my credits with two college students during 2011?</p>

<p>couple of questions:</p>

<p>1) why did the tax sw pick only one of my kids for the Amer opp credit? is it only supposed to go to one kid who is in college and it picks the one with more costs?</p>

<p>2) why didn't I get more (all) of the credits listed below? Are some mutually exclusive (and the the tax sw presumably picked the one(s) that were the most advantageous?</p>

<p>Tuition and fees deduction: $0
Tentative American opportunity credit: $2,500 Which students...[only one of my kids]
Tentative lifetime learning credit: $0
Nonrefundable education credits: $0
Refundable American opportunity credit: $1,000</p>

2

<p>The credit is per student. I don’t know why it would have only allowed one student. Assuming they are both eligible - both claimed as your dependents, at least half time, have not already completed their 4th year of school, are in a degree seeking program, have sufficient qualified expenses ($4000 per student for the max credit), and that you have incurred enough tax to get the full credit (only 40% is refundable).</p>

<p>You are only eligible for one of the tax credits in any tax year. You can’t get AOC, and LLC, and tuition and fees deduction, only one of them.</p>

<p>IRS 970 has all the rules.</p>

3

<p>thanks for the reply and the citation. Both students satisfy the criteria that you listed…</p>

<p>both claimed as your dependents, at least half time, have not already completed their 4th year of school, are in a degree seeking program, </p>

<p>have sufficient qualified expenses ($4000 per student for the max credit), </p>

<p>but on this one…notsosure</p>

<pre><code> ***and that you have incurred enough tax to get the full credit (only 40% is refundable).
</code></pre>

<p>…my final tax due = zero (after filling out the whole tax form). I guess I was looking for the most <em>refundable</em> credit that is due.</p>

4

<p>roderick - It’s not based on your tax due, it’s based on how much you paid. I overpaid my taxes and am getting about 7K as a refund and both my kids qualified. If you have already paid into the system all year, I would rerun the numbers. in fact, up to $1,000 per child is refundable even if your tax liability is zero.</p>

5

<p>as GT said, the important thing is the amt paid during the yr. One very confusing thing I have discovered is that box 2 of the 1098 gives amt BILLED, and further, it is not even standard over diff institutions. child one’s 1098t info is the amt billed for the whole academic yr (over 2011 and 2012) and child two instition provided amt billed for only 2011.</p>

<p>as swim said, pub 970 has good info and there is a chart on pg 79, appendix b</p>

<p><a href=“http://www.irs.gov/pub/irs-pdf/p970.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p970.pdf&lt;/a&gt;&lt;/p&gt;