Form 8863 Instructions

Use Form 8863 instructions if you're claiming education credits on your taxes. This form is the most important document you will have to fill out when you're determining eligible credits. You can either receive a refundable credit or a nonrefundable credit. They both have different rules, which is why it's essential that you carefully follow all Form 8863 instructions.

To fill out Form 8863, you will need:

  • Calculator
  • Social security numbers for qualifying students
  • Form 1040
  1. Those Who Can Make a Claim. The first thing you will need to do is check the Form 8863 instructions to see if you're eligible. You can make a claim if you or your spouse was enrolled in college. Not only that, but you can also make a claim if you had a dependent on your tax return that was enrolled in college.
  2. Those Who Cannot Make a Claim.  According to the Form 8863 instructions, you cannot make a claim if you're listed as a dependent on another person's taxes. If you're married, but filed taxes separately, you are unable to make a claim. Along with that, you can't make a claim if you have a high modified adjusted gross income.
  3. Eligible Colleges.  In order to receive education credits, it has to be an eligible college that you were attending. Eligible schools are ones that are accredited. It can be a university, private college, or even a vocational school. Along with this, the college must be a participant in the student aid program that's administered by the Department of Education.
  4. Deciding Which Credit to Take.  Based on the Form 8863 instructions, you can choose between the American Opportunity Credit or the Lifetime Learning Credit. The American Opportunity Credit is refundable, but it's only good for four tax years per eligible student. The Lifetime Learning Credit differs because it's available for an unlimited amount of time. However, it is not refundable.
  5. Education Expenses that are Not Included.  No matter which credit you're claiming, there are certain education expenses that are not included. Make sure to pay close attention to these Form 8863 instructions. The expenses that do not count include room and board, transportation, noncredit courses and student activity fees.



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