Education Worksheet For Tax Year

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Student Information

1. Name of Student:

2. 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 so any taxable scholarship income can be included.)

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School Information

1. Educational Institution(s):

2. Semesters Attended:

SPRING SUMMER FALL OTHER

3. Received Form 1098-T from each institution attended?

YES - SKIP to the 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:

3a. Is the school accredited? (Search https://ope.ed.gov/dapip/#/home)

NO (STOP - We cannot prepare an education credit.)

YES. Continue to next question

3b. Do we have Account Statements?

NO (STOP - We cannot prepare an education credit.)

YES. Continue to next question

3c. 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)

1. Student's Enrollment Status:

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

Less than Half-Time (STOP - SKIP to the next section Which Credit Will Be Applied? and use LLC)

2. Is the Student Pursuing a Degree or Certification?

YES. Continue to next question.

NO (STOP - SKIP to the next section Which Credit Will Be Applied? and use LLC)

3. 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 - SKIP to the next section Which Credit Will Be Applied? and use LLC).

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

NO. Continue to next question.

YES. (STOP - SKIP to the next section Which Credit Will Be Applied? and use LLC).

5. 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. (Continue to the next section, Which Credit Will Be Applied? and use AOC.)

YES. (Continue to the next section, Which Credit Will Be Applied? and use LLC.)

What Credit Will Be Applied?

Select the education credit you are preparing, based on the responses above.

American Opportunity Credit (AOC)

Lifetime Learning Credit (LLC)

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Are You Using Account Statements?

Use Form 1098-T to Select the Correct Option Below

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 is scholarship income for the student.)

There is no Form 1098-T for a qualifying institution. Account Statements are being used by the Drop-Off program to calculate any credit.

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 is scholarship income for the student.)

There is no Form 1098-T for a qualifying institution. Account Statements are being used by the Drop-Off program to calculate any credit.

Expenses

Enter the 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.)

If there is no 1098-T and Drop-Off is using Account Statements to calculate a credit, enter individual expenses. Leave the Box 1 field blank above.

--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

Book & 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 CREDIT, books/supplies may be included only if the student was required to purchase them directly from the school. They usually appear on the account summaries and/or are already 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

Are you using Account Statements to maximize the credit or because there is no Form 1098-T? (See Are You Using Account Statements? above.)

NO. 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.)

YES. Leave the Box 5 field blank above and in the fields below, select each scholarship/grant from the Account Statements.

• Your entries should total the amount in Box 5 of Form 1098-T (if any).
• Check the List of Scholarships and Grants document on CTC Resources for any scholarship/grants not listed.
• Use the OTHER options for any scholarship/grants not on the selection list.

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

Add Scholarship or Grant Remove Last Scholarship or Grant

Form 1099-Q Distributions

If there is no Form 1099-Q, skip to the next section.
If there is a Form 1099-Q, be sure that it is in scope before proceeding. See Form 1099-Q & Education Expenses

Distributions $

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Outcome and Next Steps

Choose the option (A or B) that most benefits the student/family or best matches their circumstances.

OPTION A - most closely matches the 1098-T but includes any book and supply expenses
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 (amount at left) in TaxSlayer as: Tuition Paid: (amount at left) Grants: $0 Other Qualified Expenses: $0
TAXABLE INCOME	Taxable Scholarships and Grants*	$	Report on the tax return of the student, dependent or non-dependent. Enter (amount at left) in TaxSlayer as: Income: Other Income: Other Compensation: Taxable Scholarships and Grants
OPTION B - maximizes expenses by transferring additional 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 (amount at left) in TaxSlayer as: Tuition Paid: (amount at left) Grants: $0 Other Qualified Expenses:$0
TAXABLE INCOME	Taxable Scholarships and Grants*	$	Report on the tax return of the student, dependent or non-dependent. Enter (amount at left) in TaxSlayer as: Income: Other Income: Other Compensation: Taxable Scholarships and Grants

NOTE: If the amount of scholarship income to be declared is more than the amount listed below for the tax year 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 scholarship income calculated in Option A is at or below the applicable limit, but Option B would cause the scholarship income to exceed the limit, you can in some cases use the restriction below to limit the additional transfer and keep the student's return in scope.

IMPORTANT:

• The restriction limits additional scholarship income from Option B; it cannot reduce scholarship income already calculated in Option A.
• If Option A already exceeds the applicable limit, this restriction cannot be used to reduce it.
• If Option A is at or below the limit and Option B would cause the scholarship income to exceed the limit, the restriction may be used in some circumstances to limit the additional transfer.

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

Maximum additional scholarship income to transfer to the student. (Click the checkbox and enter amount.) :

 

Maximum Amount of Taxable Scholarship Income to Avoid Kiddie Tax for a Dependent Student
2026:	$2,700	2024:	$2,600	2022:	$2,300
2025:	$2,700	2023:	$2,500	2021:	$2,200

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: