American Opp Credit

[B. Jani]

Hello Friends:

Finally snow in NY is melting and recovering from February cold. But my mind is frozen:

I have a client with child in college. 1098-T shows fees paid $4500 and Scholarship and Grants are $6500 in box 5.

For AOC, ATX-MAX add both number and give full $1500+$1000 credit. Is this correct?

Thank you,

[NECPA in NEBRASKA]

You need more information on the Scholarships and Grants. They are more than the tuition paid, and would normally negate the credit unless, you can apply the scholarship to other non-tuition expenses and make the scholarship or grant taxable. It really helps to get the burser or cashier's statements, since the 1098-T is not very reliable in many cases. You also need to get qualifying books and supplies, because those are not generally included in the 1098-T.

[Jack from Ohio]

On the Education Expenses input sheet for the 1098-T, uncheck the box that says "add this to education credits" and things will correct themselves.  That checkbox adds the scholarships and grants to the amount paid.

[B. Jani]

Thank you Jack. A little check mark did the magic.