Education Worksheet For Tax Year

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Student Information

Name of Student:

Student is a dependent on another taxpayer's return:

NO and I am preparing the student's return (continue to School Information)

YES and I am preparing the parent/guardian's return (continue to School Information)

YES and I am preparing the student's return (STOP. Do not complete the worksheet for the student's tax return. The credit belongs on the parent/guardian's return. The dependent student should file their tax return after their parent/guardian in case there is taxable scholarship income to be included.)

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School Information

Educational Institution(s):

Semesters Attended:

SPRING SUMMER FALL OTHER

Received Form 1098-T from each institution attended?

YES - Continue to next section, Determining Which Credit to Claim (AOC vs LLC)

NO - Answer the remaining questions in this section

Answer the following questions for each institution that did not issue Form 1098-T.

Is school accredited? (Search https://ope.ed.gov/dapip/#/home)

NO (STOP - We cannot prepare an education credit)

YES. Continue to next question

Do we have Account Statements?

NO (STOP - We cannot prepare an education credit)

YES. Continue to next question

Do we have the EIN of the institution?

NO (STOP - We cannot prepare an education credit)

YES. Continue to Determining Which Credit to Claim (AOC vs LLC)

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Determining Which Credit to Claim

(AOC vs LLC)

Student's Enrollment Status:

Half-Time or More for at least One Semester. Continue to next question.

Less than Half-Time (STOP - Use LLC and continue to next section, Which Credit Will Be Applied?)

Is the Student Pursuing a Degree or Certification?

YES. Continue to next question.

NO (STOP - Use LLC and continue to next section, Which Credit Will Be Applied?)

At the beginning of the tax year being prepared, had the student completed the first four years of an undergraduate program and/or is "Graduate Student" checked on Form 1098-T?

NO. Continue to next question.

YES. (STOP - Use LLC and continue to next section, Which Credit Will Be Applied?)

Has the American Opportunity Credit already been claimed on four prior tax returns?

NO. Continue to next question.

YES. (STOP - Use LLC and continue to next section, Which Credit Will Be Applied?)

Was the student convicted of a felony for possession or distribution of a controlled substance before the end of the tax year being prepared?

NO. (Use AOC and continue to the next section, Which Credit Will Be Applied?)

YES. (Use LLC and continue to next section, Which Credit Will Be Applied?)

What Credit Will Be Applied?

American Opportunity Credit (AOC)

Lifetime Learning Credit (LLC)

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Are you using Account Statements?

Use Form 1098-T

American Opportunity Credit (AOC):

Box 1 is larger than 0 and Box 5 is 0 or empty (No Account Statements)

Box 1 is larger than Box 5 by at least $4,000 (No Account Statements. Credit is already maximized)

Box 1 is larger than Box 5 by less than $4,000 (Account Statements are recommended to maximize the credit. There may be scholarship income for the student.)

Box 5 is larger than Box 1 (Account Statements are required to claim any education credit. There will be scholarship income for the student.)

There is no Form 1098-T for a qualifying institution (Account Statements are required to claim any education credit. Send the tax return to Drop-Off for preparation.)

Lifetime Learning Credit (LLC):

Box 1 is larger than 0 and Box 5 is 0 or empty (No Account Statements.)

Box 1 is larger than Box 5 by at least $10,000 (No Account Statements. Credit is already maximized)

Box 1 is larger than Box 5 by less than $10,000 (Account Statements are recommended to maximize education credit. There may be scholarship income for the student.)

Box 5 is larger than Box 1 (Account Statements are required to claim any education credit. There will be scholarship income for the student.)

There is no Form 1098-T for a qualifying institution (Account Statements are required to claim any education credit. Send the tax return to Drop-Off for preparation.)

Expenses

Enter Amount from Box 1 of Form 1098-T: $
(If there are multiple Forms 1098-T for the same student, add Box 1 amounts together and enter the total above.)

OR IF THERE IS NO 1098-T, enter individual expenses from the Account Statements. (These returns are prepared by Drop-Off only.)

--Select School-- UT Austin ACC Texas Tech

Name of Expense	Academic Term	Amount	Qualifies for tax free scholarship? (Check if yes)	Qualifies for credit? (Check if yes)
	--Select-- Spring Summer Fall Other

Add Expense Remove Last Expense

Books and Supply Expenses

For the American Opportunity Credit, laptops/computer costs may be included only if the specific brand and model are required by the syllabus. There is no exception for virtual learning. For Lifetime Learning, books/supplies may be included only if the student was required to purchase them directly from the school.

For the Lifetime Learning Credit, books and supply expenses may be included only if the student was required to pay them directly to the school. The usually appear on the account summaries and/or are included in Box 1 of Form 1098-T. Include amounts below ONLY if they are qualifying expenses and are not already included in Box 1 of Form 1098-T.

Book Expenses:

Supply Expenses:

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Scholarships and Grants

If you are not using Account Statements to maximize the credit, enter the amount from Box 5 of Form 1098-T: $
(If there are multiple Forms 1098-T for the same student, add Box 5 amounts together and enter the total above.)
(Leave blank if using account statements.)

If you are using Account Statements to maximize the credit (Box 1 does not exceed Box 5 by more than $4000$10000) or because there is no Form 1098-T, enter scholarship and grant information from the Account Statement and check the box if necessary:

Name of Scholarship or Grant	Amount	Can be used for living expenses? (Check if yes)

Add Scholarship or Grant Remove Last Scholarship or Grant

Form 1099-Q Distributions:

Be sure that Form 1099-Q is in scope before proceeding. See Form 1099-Q & Education Expenses

Distributions $

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Outcome and Next Steps

Choose the option that most benefits the student and/or matches the circumstances.

Option A
Credit	Total Qualified Expenses. If $0, there is no credit.	$	Report on the tax return of the parents of the dependent student - or on the tax return of a non-dependent student. Enter in TaxSlayer as: Tuition Paid: (amount) Grants: $0 Other Qualified Expenses:$0
Income	Taxable Scholarships and Grants*	$	Report on the tax return of the student, dependent or non-dependent. Enter in TaxSlayer as Federal: Income: Less Common Income: Other Compensation: Taxable Scholarships and Grants
Option B - maximizes expenses by transferring additional taxable scholarship income to the student
Credit	Total Qualified Expenses. If $0, there is no credit.	$	Report on the tax return of the parents of the dependent student - or on the tax return of a non-dependent student. Enter in TaxSlayer as: Tuition Paid: (amount) Grants: $0 Other Qualified Expenses:$0
Income	Taxable Scholarships and Grants*	$	Report on the tax return of the student, dependent or non-dependent. Enter in TaxSlayer as Federal: Income: Less Common Income: Other Compensation: Taxable Scholarships and Grants

* NOTE: If the amount of scholarship income to be declared is more than $2300 and you are preparing a dependent student’s tax return, the dependent student’s return is out of scope for VITA. Options:

• Refer the student to Special Tax Services for Form 8615: Tax for Certain Children Who Have Unearned Income (aka the Kiddie Tax); or
• If the amount of scholarship income is close to $2300 (for 2023), you can restrict the amount and therefore keep the student’s return in scope. Click the checkbox below and enter an amount that limits the scholarship income to $2300. Be sure to consider any scholarship income already calculated by the worksheet in the amount. (The restricted amount to transfer cannot be less than the minimum amount of scholarship income already calculated by the worksheet in Option A.) See your Site Manager or a VLT for assistance.

See "When is Scholarship Income Out of Scope?" on CTC Resources to review the threshold amount for prior tax years.

Maximum amount of income to transfer to student (set checkbox and enter amount) :

in available qualified educational expenses are available to be included on the tax return (Form 8863) to calculate the education credit.
must be included on the student’s tax return as scholarship income.

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Show supporting calculations

Calculations

Total Qualified Tuition, Fees, Books, and Supplies for scholarships/grants
Qualified Tuition, Fees, Books, and Supplies for AOC/LLC
Total Grants, Scholarships, and 1099-Q Distributions

Supporting Calculations

Maximum amount of expenses for calculating creditLine 1
   Enter $4,000 for AOC or $10,000 for LLC
Expenses that qualify for tax-free scholarships and grants but not for creditLine 2
   From table above: Qualified expenses for scholarships/grants - Qualified expenses for credit
Scholarships that cannot be used for non-living expenses and 1099-Q distributions allocated to expenses that don't qualify for the creditLine 3
   Lesser of line 2 and (scholarships/grants that cannot be used for living expenses + 1099-Q distributions)
Remaining Scholarships/Grants that cannot be used for living expenses and 1099-Q distributionsLine 4
   (Scholarships/grants that cannot be used for living expenses + 1099-Q distributions) - line2
Remaining expenses that do not qualify for creditLine 5
   Line 2 - line 3
Scholarships that can be used to living expenses allocated to expenses that don't qualify for the creditLine 6
   Minimum of line 5 and scholarships and grants that can be used for living expenses
Remaining Scholarships/Grants that can be used for living expensesLine 7
   Line 5 - Line 6
Subtract remaining scholarships, grants, and 1099-Q distributions from expenses that qualify for the creditLine 8
   Qualified expenses from table above - line4
Qualified expenses for credit before income transferLine 9
   Line 8 - Line 11. Put 0 if negative or Line 1 if greater than line 1.
Taxable scholarship before income transferLine 10
   Line 7 + Line 8, put 0 if negative
Transfer amountLine 11
   Line 6 + Line 7
Qualified expenses for credit after income transferLine 12
   Line 9 + Line 11
Taxable scholarship after income transferLine 13
   Line 10 + Line 11

Comments/Notes: