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

Part I — Refundable American

return, you may need to repay some or all of the credit that you

claimed. See Credit recapture, next.

Opportunity Credit

Credit recapture. If any tax-free educational assistance for the

qualified education expenses paid in 2015, or any refund of your

Line 1

qualified education expenses paid in 2015, is received after you

file your 2015 income tax return, you must recapture (repay) any

Enter the amount from Part III, line 30. If you are claiming the

excess credit. You do this by refiguring the amount of your

American opportunity credit for more than one student, add the

adjusted qualified education expenses for 2015 by reducing the

amounts from each student's Part III, line 30, and enter the total

expenses by the amount of the refund or tax-free educational

for those students on line 1.

assistance. You then refigure your education credit(s) for 2015

Line 3

and figure the amount by which your 2015 tax liability would

have increased if you had claimed the refigured credit(s).

Enter your modified adjusted gross income. Generally, your

Include that amount as an additional tax for the year the refund

modified adjusted gross income is the amount on your Form

or tax-free assistance was received.

1040, line 38, or Form 1040A, line 22. However, if you are filing

Form 2555, Form 2555-EZ, or Form 4563, or are excluding

Example. You paid $8,000 tuition and fees in December

2015 for your child's Spring semester beginning in January

income from Puerto Rico, you must include on line 3 the amount

2016. You filed your 2015 tax return on February 2, 2016, and

of income you excluded. For details, see Pub. 970.

claimed a lifetime learning credit of $1,600 ($8,000 qualified

Line 7

education expense paid x .20). You claimed no other tax credits.

After you filed your return, your child withdrew from two courses

If you were under age 24 at the end of 2015 and the conditions

and you received a refund of $1,400. You must refigure your

listed below apply to you, you cannot claim any part of the

2015 lifetime learning credit using $6,600 ($8,000 qualified

American opportunity credit as a refundable credit on your tax

education expenses − $1,400 refund). The refigured credit is

return. Instead, you can claim your allowed credit, figured in Part

$1,320 and your tax liability increased by $280. You must

II, only as a nonrefundable credit to reduce your tax.

include the difference of $280 ($1,600 credit originally claimed −

You do not qualify for a refundable American opportunity

$1,320 refigured credit) as additional tax on your 2016 income

credit if 1 (a, b, or c), 2, and 3 below apply to you.

tax return. See the instructions for your 2016 income tax return

to determine where to include this tax.

1. You were:

If you paid qualified education expenses in both 2015

a. Under age 18 at the end of 2015, or

and 2016 for an academic period that begins in the first

TIP

b. Age 18 at the end of 2015 and your earned income

3 months of 2016 and you receive tax-free educational

assistance, or a refund, as described above, you may choose to

(defined later) was less than one-half of your support

reduce the qualified education expenses you paid in 2016

(defined later), or

instead of reducing the qualified education expenses you paid in

c. Over age 18 and under age 24 at the end of 2015 and a

2015.

full-time student (defined later) and your earned income

(defined later) was less than one-half of your support

Eligible Educational Institution

(defined later).

An eligible educational institution is generally any accredited

2. At least one of your parents was alive at the end of 2015.

public, nonprofit, or proprietary (private) college, university,

3. You are not filing a joint return for 2015.

vocational school, or other postsecondary institution. Also, the

institution must be eligible to participate in a student aid program

administered by the Department of Education. Virtually all

If you meet these conditions, check the box next to line 7,

accredited postsecondary institutions meet this definition.

skip line 8, and enter the amount from line 7 on line 9. If these

An eligible educational institution also includes certain

conditions do not apply to you, complete line 8.

educational institutions located outside the United States that

You can answer the following questions to determine whether

are eligible to participate in a student aid program administered

you qualify for a refundable American opportunity credit.

by the Department of Education.

1. Were you under age 24 at the end of 2015?

The educational institution should be able to tell you if it

If no, stop here; you do qualify to claim part of the allowable

is an eligible educational institution.

TIP

American opportunity credit as a refundable credit.

If yes, go to question 2.

Additional Information

2. Were you over age 18 at the end of 2015?

If yes, go to question 3.

See Pub. 970, Tax Benefits for Education, chapters 2 and 3, for

If no, go to question 4.

more information about these credits.

3. Were you a full-time student (defined later) for 2015?

Specific Instructions

If no, stop here; you do qualify to claim part of your allowable

American opportunity credit as a refundable credit.

If yes, go to question 5.

You must complete a separate Part III on page 2

for each individual for whom you are claiming

4. Were you age 18 at the end of 2015?

either credit before you complete Parts I and II.

If yes, go to question 5.

CAUTION

If no, go to question 6.

5. Was your earned income (defined later) less

than one-half of your support (defined later) for 2015?

If no, stop here; you do qualify to claim part of your allowable

American opportunity credit as a refundable credit.

-5-

Instructions for Form 8863 (2015)

Instructions For Form 8863 Education Credits (American Opportunity And Lifetime Learning Credits) - 2015 Page 5

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