The tips below will help avoid common AOTC errors. Use caution to ensure you do not:
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, Tuition Statement, 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.
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 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.
- Complete Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), answering all questions.
- Return preparers should ask probing questions to verify the student's eligibility. See our Know the questions to ask about refundable credits page.
Use the Interactive Tax Assistant to see if you’re eligible to claim an education credit.
Resources
Education credits
- What you need to know about AOTC and LLC
- Compare education credits
- Qualified education expenses
- Education credits: Questions and answers
- No double benefits allowed
- Eligible educational institution
- American Opportunity Tax Credit
- AOTC key messages
- Education credits products
- Education credits—AOTC and LLC
- Lifetime Learning Credit
- Tax benefits for education: Information center
Useful forms and publications
- Publication 970, Tax Benefits for Education
- Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)
- Form 8863 instructions
- Form 1098-T, Tuition Statement
- Form 1098-E and T Instructions
Education credit marketing materials
- Publication 4772, American Opportunity Tax Credit PDF
- Publication 5081, Education Credits Online Resource Guide PDF
- Publication 5198, Are you or a family member attending college or taking courses to acquire or improve job skills? PDF
Tax tips
- Tax tip 2022-38, Two tax credits that can help cover the cost of higher education
- Tax tip 2022-123, College students should study up on these two tax credits