Instructions For Form 8863 - Education Credits (American Opportunity And Lifetime Learning Credits) - 2011

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2011
Department of the Treasury
Internal Revenue Service
Instructions for Form 8863
Education Credits (American Opportunity and Lifetime Learning Credits)
Both of these credits have different rules that can affect your
Section references are to the Internal Revenue Code unless
eligibility to claim a specific credit. These differences are shown
otherwise noted.
in Table 1 below.
General Instructions
You may be able to take the tuition and fees deduction
for you, your spouse, or a dependent, instead of an
TIP
What’s New
education credit. Figure your tax both ways and choose
the one that gives you the lower tax. See Form 8917, Tuition
Hope credit. The Hope credit is not available for 2011.
and Fees Deduction, and chapter 6 of Pub. 970, Tax Benefits
for Education, for more information about the tuition and fees
Future Developments. The IRS has created a page on
deduction.
IRS.gov for information about Form 8863 and its instructions, at
Information about any future
Who Can Claim an Education Credit
developments affecting Form 8863 (such as legislation enacted
after we release it) will be posted on that page.
You may be able to claim an education credit if you, your
spouse, or a dependent you claim on your tax return was a
Purpose of Form
student enrolled at or attending an eligible educational
Use Form 8863 to figure and claim your education credits,
institution. The credits are based on the amount of qualified
which are based on qualified education expenses paid to an
education expenses paid for the student in 2011 for academic
eligible postsecondary educational institution. For 2011, there
periods beginning in 2011 and in the first 3 months of 2012.
are two education credits.
Qualified education expenses must be reduced by any
The American opportunity credit, part of which may be
!
expenses paid directly or indirectly using tax-free
refundable. Complete Parts I, III, and IV.
educational assistance. See Tax-Free Educational
CAUTION
The lifetime learning credit, which is nonrefundable.
Assistance and Refunds of Qualified Education Expenses, later.
Complete Parts II and IV.
Who can claim a dependent’s expenses. If a student is
A refundable credit can give you a refund for any part of the
claimed as a dependent on another person’s tax return, only the
credit that is more than your total tax. A nonrefundable credit
person who claims the student as a dependent can claim a
can reduce your tax, but any excess is not refunded to you.
credit for the student’s qualified education expenses. If a
Table 1. Comparison of Education Credits
Caution. You can claim both the American opportunity credit and the lifetime learning credit on the same return — but not for the same student.
American Opportunity Credit
Lifetime Learning Credit
Maximum credit
Up to $2,500 credit per eligible student
Up to $2,000 credit per return
Limit on modified adjusted $180,000 if married filing jointly;
$122,000 if married filing jointly;
gross income (MAGI)
$90,000 if single, head of household, or qualifying
$61,000 if single, head of household, or qualifying
widow(er)
widow(er)
Refundable or
40% of credit may be refundable; the rest is
Nonrefundable — credit limited to the amount of tax you
nonrefundable
nonrefundable
must pay on your taxable income
Number of years of
Available ONLY for the first 4 years of postsecondary
Available for all years of postsecondary education and for
postsecondary education
education
courses to acquire or improve job skills
Number of tax years credit Available ONLY for 4 tax years per eligible student
Available for an unlimited number of years
available
(including any year(s) Hope credit was claimed)
Type of degree required
Student must be pursuing a degree or other recognized
Student does not need to be pursuing a degree or other
education credential
recognized education credential
Number of courses
Student must be enrolled at least half time for at least
Available for one or more courses
one academic period beginning during the year
Felony drug conviction
As of the end of 2011, the student had not been
Felony drug convictions are permitted
convicted of a felony for possessing or distributing a
controlled substance
Qualified expenses
Tuition, required enrollment fees, and course materials
Tuition and required enrollment fees (including amounts
that the student needs for a course of study whether or
required to be paid to the institution for course-related
not the materials are bought at the educational institution books, supplies, and equipment)
as a condition of enrollment or attendance
Payments for academic
Payments made in 2011 for academic periods beginning in 2011 or beginning in the first 3 months of 2012
periods
Jan 01, 2012
Cat. No. 53002G

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