Avoid Common AOTC Errors

Use the tips below to help avoid common AOTC errors:

Claim a credit for a student that did not attend a college, university or vocational school

AOTC is for post-secondary education only that includes colleges, universities, and vocational schools. It includes all post-secondary educational institutions that are eligible to participate in a student aid program run by the Department of Education. Not all eligible schools participate in the financial aid program. If not listed, the school can answer if it is eligible to participate.

The eligible student must have attended at least half time for an academic period. The school determines full time status and the length of an academic period. If the student does not have a Form 1098-T PDF, ask questions to determine how long the student attended, number of courses and what the school considers full time. Ask enough questions until you feel comfortable the student qualifies and let your clients know that if the IRS audits them, they need to have documents supporting their claim. See the Form 866-H-AOC PDF and Form 866-H-AOTC-MAX PDF for examples of the documentation needed. Form 886-H-AOC (SP) PDF is also available in Spanish.

 

Claim a credit for eligible education expenses not paid or not considered as paid

See the Compare Education Credits chart for information on who is a qualifying student and for expenses paid or considered paid by your client for purposes of the AOTC.

Remember, No Double Benefits Allowed. Ask how the expenses were paid: was it from a non-taxable grant or scholarship, a qualified tuition plan, etc.

 

Claim a credit for unqualified expenses

See what are Qualified Education Expenses for more information on what qualifies and what does not qualify as expenses for Education Benefits.

 

Claim a credit for an eligible student for more than 4 years

AOTC is only available for four years for each eligible student. This includes any year the Hope credit was claimed for the same student.

 

More Tips for Avoiding Errors

• Complete the Form 8863 PDF, Education Credits, answering all questions

• Ask probing questions to verify the student's eligibility. See our Know the Questions to Ask page

• Verify the information on the Form 1098-T PDF is correct by asking what type of degree or certificate program the student is enrolled in. Ask how long the student has attended a post-secondary school. Ask for the student's enrollment status, undergraduate or graduate. Ask when the student started graduate studies.

• If the student doesn't have a Form 1098-T PDF or the Form 1098-T is incorrect, let your clients know that if the IRS audits them, they will need to have documents supporting their claim. See the Form 866-H-AOC PDF and Form 866-H-AOTC-MAX PDF for examples of the documentation needed. Form 886-H-AOC (SP) PDF is also available in Spanish.

Education Tax Credit Resources

Find out who qualifies for the Education Credits

 

Know the Questions to Ask about Refundable Credits

Find the latest news for refundable credits on What's Hot?

 

See the AOTC and the LLC criteria side by side on our Compare Education Credits chart

 

Whether you are involved in education, interact with students or parents of students or are a tax return preparer, find out What You Need to Know about AOTC and LLC

 

Find out how to Avoid Common AOTC Errors

 

Related Technical Forms and Publications

• Publication 970 PDF, Tax Benefits for Education
• Form 8863 PDF, Education Credits
• Instructions for Form 8863 PDF
• Form 1098-T PDF, Tuition Statement (Info Only)
• Instructions for Forms 1098-E and T PDF