Education Credits Questions And
Answers With Verified Solutions 100%
Correct Rated A+
What are education credits?
ANSWER: Education credits are amounts that will reduce the amount of tax due.
The amount is based on qualified education expenses that the taxpayer paid during
the tax year.
There are two different education credits:
ANSWER: The American opportunity credit and the lifetime learning credit.
Who can take an education credit?
ANSWER: Taxpayers can take education credits for themselves, their spouse,
and/or dependents (claimed on the tax return) who were enrolled at or attended an
eligible postsecondary educational institution during the tax year.
What basic requirements must the taxpayer meet?
ANSWER: To claim an education credit, verify that the following are true for the
taxpayers:
They cannot be claimed as a dependent on someone else's tax return.
They are not filing as Married Filing Separately.
Their adjusted gross income (AGI) is below the limitations for their filing
status.
They were not nonresident aliens for any part of the tax year, or if they were,
they elected to be treated as resident aliens.
How do I handle dependents?
ANSWER: The taxpayer must claim the student as a dependent to receive the
credit for the student's qualified expenses. Refer to the Education Credits Tips in
, the Volunteer Resource Guide, Education Benefits tab, demonstrated by the
following example.
What are qualifying expenses?
ANSWER: Qualified education expenses are tuition and certain related expenses
required for enrollment or attendance at an eligible educational institution.
Form 1098-T, Tuition Statement, issued by the school.
ANSWER: Identifies the expenses that qualify for education credits.
Which expenses do not qualify?
ANSWER:
Room and board, insurance, medical expenses (including student health
fees), transportation costs, or other similar personal, living, or family
expenses.
Any course of instruction or other education involving sports, games, or
hobbies, unless the course is part of the student's degree program or (for the
lifetime learning credit) helps the student to acquire or improve job skills.
Scholarships and grants:
ANSWER: Do not reduce the qualified education expenses by any scholarship or
fellowship reported as income on the student's tax return if the use of the
scholarship is not restricted and used to pay education expenses that are not
qualified (such as room and board). Some students may choose to pay non-
qualifying expenses with scholarship/Pell grants funds, making the scholarship/Pell
grants taxable. This is true even if the scholarship/grant was paid directly to the
school.
The American Opportunity Credit:
ANSWER:
Answers With Verified Solutions 100%
Correct Rated A+
What are education credits?
ANSWER: Education credits are amounts that will reduce the amount of tax due.
The amount is based on qualified education expenses that the taxpayer paid during
the tax year.
There are two different education credits:
ANSWER: The American opportunity credit and the lifetime learning credit.
Who can take an education credit?
ANSWER: Taxpayers can take education credits for themselves, their spouse,
and/or dependents (claimed on the tax return) who were enrolled at or attended an
eligible postsecondary educational institution during the tax year.
What basic requirements must the taxpayer meet?
ANSWER: To claim an education credit, verify that the following are true for the
taxpayers:
They cannot be claimed as a dependent on someone else's tax return.
They are not filing as Married Filing Separately.
Their adjusted gross income (AGI) is below the limitations for their filing
status.
They were not nonresident aliens for any part of the tax year, or if they were,
they elected to be treated as resident aliens.
How do I handle dependents?
ANSWER: The taxpayer must claim the student as a dependent to receive the
credit for the student's qualified expenses. Refer to the Education Credits Tips in
, the Volunteer Resource Guide, Education Benefits tab, demonstrated by the
following example.
What are qualifying expenses?
ANSWER: Qualified education expenses are tuition and certain related expenses
required for enrollment or attendance at an eligible educational institution.
Form 1098-T, Tuition Statement, issued by the school.
ANSWER: Identifies the expenses that qualify for education credits.
Which expenses do not qualify?
ANSWER:
Room and board, insurance, medical expenses (including student health
fees), transportation costs, or other similar personal, living, or family
expenses.
Any course of instruction or other education involving sports, games, or
hobbies, unless the course is part of the student's degree program or (for the
lifetime learning credit) helps the student to acquire or improve job skills.
Scholarships and grants:
ANSWER: Do not reduce the qualified education expenses by any scholarship or
fellowship reported as income on the student's tax return if the use of the
scholarship is not restricted and used to pay education expenses that are not
qualified (such as room and board). Some students may choose to pay non-
qualifying expenses with scholarship/Pell grants funds, making the scholarship/Pell
grants taxable. This is true even if the scholarship/grant was paid directly to the
school.
The American Opportunity Credit:
ANSWER:
