The IRS may also charge you an accuracy or a fraud penalty or you can be banned from claiming the AOTC for two to ten years.

If the IRS audits your return and finds your AOTC claim is incorrect and you don’t have the documents to show you qualified, you must pay back the amount of the AOTC you received in error with interest. Make sure you are qualified before claiming the credit and make sure you keep copies of all the documents you used to find out if you qualify and determine the amount of your credit. To claim AOTC, you must complete the Form 8863 PDF and attach the completed form to your tax return. If it isn’t correct or you do not receive the form, contact your school. See qualified education expenses in Publication 970 PDF, Tax Benefits for Education, for more information on what amount to claim.Ĭheck the Form 1098-T to make sure it is correct. But this amount may not be the amount you can claim. The form will have an amount in box 1 to show the amounts received during the year. This statement helps you figure your credit. Generally, students receive a Form 1098-T PDF Tuition Statement, from their school by January 31. To be eligible to claim the AOTC or the lifetime learning credit (LLC), the law requires a taxpayer (or a dependent) to have received Form 1098-T, Tuition Statement, from an eligible educational institution, whether domestic or foreign. For schools that use clock or credit hours and do not have academic terms, the payment period may be treated as an academic period. The schools determine the academic periods. *Academic Period can be semesters, trimesters, quarters or any other period of study such as a summer school session. Not have a felony drug conviction at the end of the tax year.Not have claimed the AOTC or the former Hope credit for more than four tax years.Not have finished the first four years of higher education at the beginning of the tax year.Be enrolled at least half time for at least one academic period * beginning in the tax year.Be pursuing a degree or other recognized education credential.

To be eligible for AOTC, the student must: The amount of the credit is 100 percent of the first $2,000 of qualified education expenses you paid for each eligible student and 25 percent of the next $2,000 of qualified education expenses you paid for that student. If the credit brings the amount of tax you owe to zero, you can have 40 percent of any remaining amount of the credit (up to $1,000) refunded to you. You can get a maximum annual credit of $2,500 per eligible student. The American opportunity tax credit (AOTC) is a credit for qualified education expenses paid for an eligible student for the first four years of higher education.

Phase ten score card