# Frequently Asked Questions

**Source**: https://finance.uw.edu/sfs/scholarships-taxes/student-taxes/education-tax-credits/frequently-asked-questions
**Parent**: https://finance.uw.edu/sfs/scholarships-taxes/student-taxes/education-tax-credits

## American Opportunity Tax Credit (AOC)

What is the American Opportunity Credit?
:   The American Opportunity Tax Credit is a credit for qualified education expenses paid for an eligible student for the first four years of higher education.

What is the amount of the American Opportunity Credit?
:   The maximum credit per student is $2500. (100% of the first $2,000 and 25% of the next $2,000 of qualified education expenses). Also, 40% of the credit (up to $1000) is refundable.

How do I qualify for the American Opportunity Credit?
:   Generally, a taxpayer whose modified adjusted gross income is $80,000 or less ($160,000 or less for joint filers) can claim the credit for the qualified expenses of an eligible student. The credit is reduced if a taxpayer’s modified adjusted gross income exceeds those amounts. A taxpayer whose modified adjusted gross income is greater than $90,000 ($180,000 for joint filers) cannot claim the credit.

    To be eligible for AOC, the student must:

    - be enrolled in a program leading toward a degree, certificate or other recognized post-secondary educational credential.
    - not have completed the first four years of post-secondary education as of the beginning of the taxable year.
    - for at least one academic period is carrying at least ½ of the normal full-time workload for the course of study the student is pursuing.
    - not been convicted of a felony drug offense.

What expenses are eligible for the American Opportunity credit?
:   Qualified education expenses include amounts spent tuition and required fees and materials for course enrollment. This includes books, supplies, and equipment needed for a course of study.

    The following expenses do not qualify for any tax credit.

    Room and board. Transportation. Insurance. Medical expenses. Student fees unless required as a condition of enrollment or attendance. Same expenses paid with tax-free educational assistance. Same expenses used for any other tax deduction, credit or educational benefit.

Where do I find more information about the American Opportunity Credit?
:   Check [IRS Publication 970](https://www.irs.gov/forms-pubs/about-publication-970).

What form do I use to claim the American Opportunity Tax Credit?
:   Use [Form 8863](https://www.irs.gov/forms-pubs/about-form-8863) from IRS website.

## Life Team Learning Credit (LLC)

What is Lifetime Learning Tax Credit?
:   The Lifetime Learning credit is a tax credit available to students in all years of their postsecondary education and for courses to acquire or improve job skills.

What is the amount for Lifetime Learning Tax Credit?
:   It is worth up to $2,000 per tax return. (The amount of the credit is 20 percent of the first $10,000 of qualified education expenses or a maximum of $2,000 per return). There is no limit to the amount of years you can claim it.

Who qualifies for the Lifetime Learning Tax Credit?
:   To claim the LLC, you must meet all three of the following:

    1. You, your dependent or a third party pay qualified education expenses for higher education.
    2. You, your dependent or a third party pay the education expenses for an eligible student enrolled at an [eligible educational institution.](https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/eligible-educational-inst)
    3. The eligible student is yourself, your spouse or a dependent you listed on your tax return.

    To be eligible for LLC, the student must:

    - Be enrolled or taking courses at an eligible educational institution.
    - Be taking higher education course or courses to get a degree or other recognized education credential or to get or improve job skills.
    - Be enrolled for at least one academic period**\*** beginning in the tax year.

What form do I use to claim the Lifetime Learning Tax Credit?
:   [Form 8863](https://www.irs.gov/forms-pubs/about-form-8863) from the IRS website,

Where do I find more information for the Lifetime Learning Tax Credit?
:   From [IRS Publication 970](http://www.irs.gov/forms-pubs/about-publication-970).

What are the qualified expenses for the Lifetime Learning credit?
:   Qualified education expenses include only amounts for books, supplies and equipment required to be paid to the institution as a condition of enrollment or attendance.

## Tuition and Fees

What is a Tuition and Fees Deduction and when should I use this?
:   The tuition and fees deduction is for taxpayers who cannot take the American Opportunity or Lifetime Learning credit because their income is too high. To learn more about the tuition & fees deduction, please see [IRS Form 8917](https://www.irs.gov/forms-pubs/about-form-8917).

## Educational Credits - AOTC & LLC

How can I or my parents claim a Tax Credit?
:   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.

Can I claim AOTC or LLC without a valid TIN?
:   You may not claim the tax credit unless you, your spouse (if you are filing a joint return) and the qualifying student have a valid taxpayer identification number (TIN) issued or applied for on or before the due date of the tax return (including extensions).

How do I know if I should claim the AOTC or the LLC?
:   If you have any questions about the differences between the two and what is best for you. Please refer to [Compare Education Credits](https://www.eitc.irs.gov/other-refundable-credits-toolkit/compare-education-credits/compare-education-credits) on the IRS website.

## Student Loans

When I use student loans to pay tuition expenses, do I qualify to claim tax credit?
:   Yes, student loans are considered your personal funds, they are not considered financial aid or scholarship money. You are still qualified to claim the tax credit if you meet the requirement.

## Scholarship or fellowship

What happens if my Financial Aid or scholarship money is more than the tuition expenses?
:   Any financial aid or scholarship money not used to pay for tuition or education expenses is taxable income; you may have to report it as income when you file a tax return.

Is a scholarship or fellowship taxable?
:   A scholarship or fellowship is subject to tax if it exceeds the tuition charges and required book fees. Read more in IRS publication 970.

## Getting Help

Where can I get help at the University of Washington when I have a tax issue with the IRS?
:   UW law school has a Federal Tax Clinic which was established in 2000 to assist low-income individuals throughout Western Washington resolve disputes with the Internal Revenue Service. The federally-funded clinic offers this assistance as a public service and as a means of training law students in tax practice.

    For more information, please visit the [Law school website](http://www.law.washington.edu/Clinics/Tax/).

Which office should I contact if I have questions regarding American Opportunity and Lifetime Learning Tax Credit, scholarship or fellowship taxes?
:   Contact Student Fiscal Services by calling 206-221-2609, or send an email to: [taxquest@uw.edu](mailto:taxquest@uw.edu) with your **student number.**