How to Claim the Education Credit

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If you have educational expenses, you may be eligible to claim the American Opportunity, Hope or Lifetime Learning credits when filing your income taxes. Only certain education-related expenses—such as tuition, books, student activity fees, supplies and equipment—are allowed by the IRS. Each credit has a dollar limit, and a limit on how many years it can be claimed. The Hope Credit can be claimed for only the first two years of postsecondary education, while the American Opportunity Credit can be claimed for four years. There is no limit on the Lifetime Learning Credit.

Obtain a current Form 8863, Education Credits, from the IRS. If you want to obtain the form and its instructions online, go to Step 2. Otherwise, call the IRS at 1-800-829-1040 and ask the representative for a Form 8863 and its instructions. The IRS will mail them to you.

Go to the IRS.gov website and enter "Form 8863" in the search box, then click on the magnifying glass. In the window that opens, find the entries that say "Form 8863" and "Instructions for Form 8863." Open each document and print it on your home computer's printer.

Read the Form 8863 instructions to determine which credit you qualify for. Make sure you have the current year's form and instructions, because they are updated each year.

Figure the exact amount of eligible educational expenses you have paid during the year. Do not include books you did not buy from your school's bookstore.

Ask your college to send you a Form 1098-T if you can't fully calculate what you have spent. The form will show most of your education-related expenses. For course-related books, refer to your receipts and add them to the total.

Complete Form 8863, using you own expense records or the information from your Form 1098-T. Answer all of the questions pertaining to your education-related expenses and bring the form to your appointment with your accountant at tax time. If you are filing your own taxes, use the completed form when doing your online tax return. If you are mailing your return to the IRS, include Form 8863 with the rest of your paperwork.

Tips

  • The IRS usually has updated forms available by early January, in time for income-tax season. Until then, you can look at the previous year's form to get an idea of the requirements for the education credits.

References

Photo Credits

  • education image by Anatoly Tiplyashin from Fotolia.com