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Claiming the American Opportunity Tax Credit You must complete the relevant sections of IRS Form 8863 and attach it to a personal income tax return to claim the credit. For tax year 2023, the credit begins to phase out for: Single taxpayers who have adjusted gross income between $80,000 and $90,000.
If you claim a dependent, only you can claim the education credit. Therefore, you would enter Form 1098-T and the dependent's other education information in your return. If you do not claim a dependent, the student can claim the education credit.
The American Opportunity Tax Credit is a tax credit to help pay for education expenses paid for the first four years of education completed after high school. You can get a maximum annual credit of $2,500 per eligible student and 40% or $1,000 could be refunded if you owe no tax.
Be enrolled at least half time for at least one academic period* beginning in the tax year. Not have finished the first four years of higher education at the beginning of the tax year. Not have claimed the AOTC or the former Hope credit for more than four tax years.
What should I do with my 1098-T? When you're ready to file your federal income tax return, make sure you have your Form 1098-T on hand ? if you received one. It can help you calculate two potentially valuable education credits ? the American opportunity tax credit and the lifetime learning credit.