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Form 8863 - Educational credit allowed but not populatingCredit is nonrefundable

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📚 What This Guide Covers

• Nonrefundable credit rules - how the credit is used to reduce taxes payable
• When you cannot claim it as refundable - based on age, student status, income/support, and filing status
• How to enter amounts on the form - what to do with line 7, line 8, and line 9
• EIN requirement - where the educational institution’s EIN must be provided

🧾 Nonrefundable vs. refundable American opportunity credit

If you were under age 24 at the end of 2018 and the conditions listed below apply to you, you cannot claim any part of the American opportunity credit as a refundable credit on your tax return. Instead, you can claim your allowed credit, figured in Part II, only as a nonrefundable credit to reduce your tax.

You don't qualify for a refundable American opportunity credit if 1 (a, b, or c), 2, and 3 below apply to you.

Step 1: Check condition 1 (age/student/earned income vs. support)

Were you under age 24 at the end of 2018, and do any of the following apply?

• 1(a): You were under age 18 at the end of 2018, or
• 1(b): You were age 18 at the end of 2018 and your earned income (defined later) was less than one-half of your support (defined later), or
• 1(c): You were over age 18 and under age 24 at the end of 2018 and a full-time student (defined later) and your earned income (defined later) was less than one-half of your support (defined later).

Step 2: Check condition 2 (parent alive at end of 2018)

Does at least one of your parents was alive at the end of 2018?

2. At least one of your parents was alive at the end of 2018.

Step 3: Check condition 3 (filing status)

Are you filing a joint return for 2018?

3. You're not filing a joint return for 2018.

Step 4: If all conditions apply, use line 7 and skip line 8

If you meet these conditions, enter the credit as nonrefundable.

• If you meet these conditions, check the box next to line 7, skip line 8, and enter the amount from line 7 on line 9.
• If these conditions don't apply to you, complete line 8.

❓ Questions to determine whether you qualify for a refundable American opportunity credit

Question 1: Were you under age 24 at the end of 2018?

TIP

CAUTION

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If no, stop here; you do qualify to claim part of the allowable American opportunity credit as a refundable credit.

If yes, go to question 2.

Question 2: Were you over age 18 at the end of 2018?

If yes, go to question 3.

If no, go to question 4.

Question 3: Were you a full-time student (defined later) for 2018?

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.

Question 4: Were you age 18 at the end of 2018?

If yes, go to question 5.

If no, go to question 6.

Question 5: Was your earned income (defined later) less than one-half of your support (defined later) for 2018?

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 6.

Question 6: Were either of your parents alive at the end of 2018?

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 7.

Question 7: Are you filing a joint return for 2018?

If no, you don't qualify to claim part of your allowable American opportunity credit as a refundable credit.

If yes, you do qualify to claim part of your allowable American opportunity credit as a refundable credit.

📝 Educational institution EIN requirement

The educational institution's EIN must be provided on line 22(4) if the American opportunity credit is claimed for this student

Tags: federal,form