What You Need to Know to Claim Education Credits

You’d be surprised…many taxpayers pay for college and don’t know they can get money back from the IRS.  It comes in the form of tax credits, which are claimed on the federal income tax return.  Education credits can shave thousands of dollars off your tax bill, so your money stays right where you want it: with you.  How do Education Credits work?  Well first you’ll need a copy of IRS Form 8863, titled Education Credits (American Opportunity and Lifetime Learning Credits).  Secondly you’ll have to understand the rules for claiming these education credits.  I’ve broken them down below, so this should be a snap!

A Little Bit About Form 8863

Form 8863 is only two pages but it does appear a bit dense with words and questions when you take a look at the actual form, which you can do on the IRS website.  Here’s the link.  That’s because there are a lot of questions about these types of theings:

  1. the school/college/university that was attended
  2. whether or not you received a 1098-T in the mail from the School
  3. if a 1098-T was received, whether a certain box was checked
  4. name and address of the school attended
  5. whether any other Education Credits have been claimed for this student in the past 4 years
  6. questions about the level of enrollment for the student: half time, full time etc
  7. other questions about the student and his/her education history

As you can see, you’ll have to gather information and a few documents before attempting to fill out IRS form 8863.

The 1098-T: Tuition Statement

Dig around your home for any mail you’ve received from the educational institution attended, to see whether you received a 1098-T.  This is merely a statement of how much tuition was paid to the school.  It’s actually required by the IRS, your school must send it to you.  If you can’t find it, check with your school and they can probably re-issue the 1098-T for you.  Sometimes they even have an online login where you can request your 1098-T online.

Once you have this document, it will be a heck of a lot easier to fill out Form 8863 to claim your Education Credits.  Good luck!