If you paid qualified education expenses for yourself, your spouse, or a dependent attending an eligible college or other post-secondary school, you may need to file Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits). This form is used to calculate and claim valuable tax credits that can help reduce your federal income tax.
There are two education credits available:
- American Opportunity Credit (AOC), which may be partially refundable.
- Lifetime Learning Credit (LLC), which is nonrefundable.
Our software will review your information and recommend the credit that provides the greatest tax benefit.
Can You Claim Both Education Credits?
For a single student, you can claim only one education credit per tax year.
Example
If you claim the American Opportunity Credit for your child on your 2026 tax return, you cannot also claim the Lifetime Learning Credit for that same child during the same year.
If you're eligible for both credits for the same student, you can choose either one, but not both.
Multiple Students
If you paid qualified education expenses for more than one student, you can choose different credits for different students.
For example:
Claim the American Opportunity Credit for one student.
Claim the Lifetime Learning Credit for another student.
Who Can Claim an Education Credit?
You may qualify for an education credit if:
- You, your spouse, or a dependent claimed on your tax return attended an eligible educational institution.
- The student received Form 1098-T, Tuition Statement.
- You paid qualified education expenses during the tax year.
Education credits generally apply to qualified expenses paid during 2026 for:
- Academic periods that begin in 2026, or
- Academic periods that begin during the first three months of 2027.
Example
If you paid $1,500 in December 2026 for tuition for a semester that begins in January 2027, those expenses may still qualify for a 2026 education credit.
What Is an Academic Period?
An academic period may include:
- Semesters
- Trimesters
- Quarters
- Summer sessions
- Other periods of study established by the school
For schools that don't use academic terms, each payment period may be treated as an academic period.
What Is an Eligible Educational Institution?
An eligible educational institution is generally any accredited:
- College
- University
- Vocational school
- Other post-secondary school
The institution must be eligible to participate in federal student aid programs administered by the U.S. Department of Education.
Most accredited public, nonprofit, and for-profit colleges qualify. Some schools outside the United States may also be eligible.
If you're unsure whether your school qualifies, contact the institution directly.
Who Can Claim a Dependent's Education Expenses?
Education credits are tied to who claims the student as a dependent.
If the Student Is Your Dependent
If you claim the student as a dependent on your tax return, you generally claim the education credit, even if the expenses were paid using:
- The student's earnings
- Gifts
- Inheritance funds
- Savings accounts
If the Student Is Not Your Dependent
If no one claims the student as a dependent, the student may claim the education credit on their own return if all other requirements are met.
What Are Qualified Education Expenses?
Education credits are based on qualified education expenses paid for enrollment or attendance at an eligible educational institution.
Generally, qualified expenses include:
- Tuition
- Mandatory enrollment fees
- Certain required course materials
To claim a credit, the eligible educational institution must generally issue a Form 1098-T showing an amount in Box 1.
Who Cannot Claim an Education Credit?
You generally cannot claim an education credit if any of the following apply:
- You are claimed as a dependent on someone else's tax return.
- Your filing status is Married Filing Separately.
- You or your spouse were a nonresident alien during the tax year and did not elect to be treated as a U.S. resident for tax purposes.
- Your income exceeds the credit's eligibility limits.
Income Limits
American Opportunity Credit (AOC)
For 2026, the credit begins to phase out when your Modified Adjusted Gross Income (MAGI) exceeds:
- $80,000 for Single filers
- $160,000 for Married Filing Jointly
The credit is reduced as income increases and is generally unavailable at:
- $90,000 for Single filers
- $180,000 for Married Filing Jointly
Lifetime Learning Credit (LLC)
The Lifetime Learning Credit is also subject to MAGI limitations. Eligibility phases out at higher income levels based on IRS rules for the tax year.
How to Enter Education Credits in the Program
To enter your education information and determine whether you qualify for an education credit:
- Go to Federal
- Select Deductions
- Choose Select My Forms
- Select Credits Menu
- Choose Education Credits
Key Takeaway
Use Form 8863 whenever you're eligible to claim the American Opportunity Credit or Lifetime Learning Credit. These credits can help offset the cost of higher education for you, your spouse, or a dependent. If you're eligible for more than one credit, our software will compare them and help you claim the option that provides the greatest benefit.
Related Tip
Be sure to keep your Form 1098-T and receipts for tuition, books, and required course materials. You'll need these records to accurately calculate qualified education expenses and maximize any education credits you're entitled to claim.