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IRS.gov Website
Publication 970
taxmap/pubs/p970-056.htm#en_us_publink1000178764

Glossary(p80)

rule
The education benefits included in this publication were enacted over many years, leading to a number of common terms being defined differently from one benefit to the next. For example, an eligible educational institution means one thing when determining if earnings from a Coverdell education savings account are not taxable and something else when determining if a scholarship or fellowship is not taxable.
For each term listed below that has more than one definition, the definition for each education benefit is listed.
taxmap/pubs/p970-056.htm#en_us_publink1000178765

Academic period:(p80)

rule
A semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. If an educational institution uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period.
taxmap/pubs/p970-056.htm#en_us_publink1000178766

Adjusted qualified education expenses (AQEE):(p80)

rule
Qualified education expenses (defined later) reduced by any tax-free educational assistance, such as a tax-free scholarship or employer-provided educational assistance. They must also be reduced by any qualified education expenses deducted elsewhere on your return, used to determine an education credit or other benefit, or used to determine a tax-free distribution. For information on a specific benefit, see the appropriate chapter in this publication.
taxmap/pubs/p970-056.htm#en_us_publink1000178767

Candidate for a degree:(p80)

rule
A student who meets either of the following requirements.
  1. Attends a primary or secondary school or pursues a degree at a college or university, or
  2. Attends an accredited educational institution that is authorized to provide:
    1. A program that is acceptable for full credit toward a bachelor's or higher degree, or
    2. A program of training to prepare students for gainful employment in a recognized occupation.
taxmap/pubs/p970-056.htm#en_us_publink1000178768

Designated beneficiary:(p80)

rule
The individual named in the document creating the account/plan who is to receive the benefit of the funds in the account/plan.
taxmap/pubs/p970-056.htm#en_us_publink1000178769

Eligible educational institution:(p80)

rule
 American opportunity credit. Any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the Department of Education. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions.
 Coverdell education savings account (ESA). Any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the Department of Education. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Also included is any public, private, or religious school that provides elementary or secondary education (kindergarten through grade 12), as determined under state law.
 Education savings bond program. Same as American opportunity credit in this category.
 IRA, early distributions from. Same as American opportunity credit in this category.
 Lifetime learning credit. Same as American opportunity credit in this category.
 Qualified tuition program (QTP). Same as American opportunity credit in this category.
 Scholarships and fellowships. An institution that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities.
 Student loan, cancellation of. Same as Scholarships and fellowships in this category.
 Student loan interest deduction. Any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the Department of Education. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Also included is an institution that conducts an internship or residency program leading to a degree or certificate from an institution of higher education, a hospital, or a health care facility that offers postgraduate training.
 Tuition and fees deduction. Same as American opportunity credit in this category.
taxmap/pubs/p970-056.htm#en_us_publink1000178777

Eligible student:(p80)

rule
 American opportunity credit.
A student who meets all of the following requirements for the tax year for which the credit is being determined.
  1.Did not have expenses that were used to figure an American opportunity or Hope credit in any 4 earlier tax years.
  2.Had not completed the first 4 years of postsecondary education (generally the freshman through senior years).
  3.For at least one academic period beginning in the tax year, was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential at an eligible educational institution.
  4.Was free of any federal or state felony conviction for possessing or distributing a controlled substance as of the end of the tax year.
 Lifetime learning credit.
A student who is enrolled in one or more courses at an eligible educational institution.
 Student loan interest deduction. A student who was enrolled at least half-time in a program leading to a postsecondary degree, certificate, or other recognized educational credential at an eligible educational institution.
 Tuition and fees deduction.
A student who has either a high school diploma or a General Educational Development (GED) credential, and who is enrolled in one or more courses at an eligible educational institution.
taxmap/pubs/p970-056.htm#en_us_publink1000178780

Half-time student:(p81)

rule
A student who is enrolled for at least half the full-time academic work load for the course of study the student is pursuing, as determined under the standards of the school where the student is enrolled.
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Modified adjusted gross income (MAGI):(p81)

rule
 American opportunity credit. Adjusted gross income (AGI) as figured on the federal income tax return, modified by adding back any:
  1.Foreign earned income exclusion,
  2.Foreign housing exclusion,
  3.Foreign housing deduction,
  4.Exclusion of income by bona fide residents of American Samoa, and
  5.Exclusion of income by bona fide residents of Puerto Rico.
 Coverdell education savings account (ESA). Same as American opportunity credit in this category.
 Education savings bond program. Adjusted gross income (AGI) as figured on the federal income tax return without taking into account any savings bond interest exclusion and modified by adding back any:
  1.Foreign earned income exclusion,
  2.Foreign housing exclusion,
  3.Foreign housing deduction,
  4.Exclusion of income by bona fide residents of American Samoa,
  5.Exclusion of income by bona fide residents of Puerto Rico,
  6.Exclusion for adoption benefits received under an employer's adoption assistance program,
  7.Deduction for student loan interest,
  8.Deduction for tuition and fees, and
  9.Deduction for domestic production activities.
 Lifetime learning credit. Same as American opportunity credit in this category.
 Student loan interest deduction. Adjusted gross income (AGI) as figured on the federal income tax return without taking into account any student loan interest deduction, tuition and fees deduction, or domestic production activities deduction, and modified by adding back any:
  1.Foreign earned income exclusion,
  2.Foreign housing exclusion,
  3.Foreign housing deduction,
  4.Exclusion of income by bona fide residents of American Samoa, and
  5.Exclusion of income by bona fide residents of Puerto Rico.
 Tuition and fees deduction. Adjusted gross income (AGI) as figured on the federal income tax return without taking into account any tuition and fees deduction or domestic production activities deduction, and modified by adding back any:
  1.Foreign earned income exclusion,
  2.Foreign housing exclusion,
  3.Foreign housing deduction,
  4.Exclusion of income by bona fide residents of American Samoa, and
  5.Exclusion of income by bona fide residents of Puerto Rico.
taxmap/pubs/p970-056.htm#en_us_publink1000178784

Phaseout:(p81)

rule
The amount of credit or deduction allowed is reduced when modified adjusted gross income (MAGI) is greater than a specified amount of income.
taxmap/pubs/p970-056.htm#en_us_publink1000178785

Qualified education expenses:(p81)

rule
See pertinent chapter for specific items.
 American opportunity credit. Tuition and certain related expenses (including student activity fees) required for enrollment or attendance at an eligible educational institution. Books, supplies, and equipment needed for a course of study are included even if not purchased from the educational institution. Does not include expenses for room and board. Does not include expenses for courses involving sports, games, or hobbies (including noncredit courses) that are not part of the student's postsecondary degree program.
 Coverdell education savings account (ESA). Expenses related to or required for enrollment or attendance of the designated beneficiary at an eligible elementary, secondary, or postsecondary school. Many specialized expenses included for K–12. Also includes expenses for special needs services and contribution to qualified tuition program (QTP).
 Education savings bond program. Tuition and fees required to enroll at or attend an eligible educational institution. Also includes contributions to a qualified tuition program (QTP) or Coverdell education savings account (ESA). Does not include expenses for room and board. Does not include expenses for courses involving sports, games, or hobbies that are not part of a degree or certificate granting program.
 IRA, early distributions from. Tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution, plus certain limited costs of room and board for students who are enrolled at least half time. Also includes expenses for special needs services incurred by or for special needs students in connection with their enrollment or attendance.
 Lifetime learning credit. Tuition and certain related expenses required for enrollment or attendance at an eligible educational institution. Student-activity fees and expenses for course-related books, supplies, and equipment are included only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance. Does not include expenses for room and board. Does not include expenses for courses involving sports, games, or hobbies (including noncredit courses) that are not part of the student's postsecondary degree program, unless taken by the student to acquire or improve job skills.
 Qualified tuition program (QTP). Tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible educational institution, plus certain limited costs of room and board for students who are enrolled at least half time. Includes expenses for special needs services and computer access.
 Scholarships and fellowships. Expenses for tuition and fees required to enroll at or attend an eligible educational institution, and course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution. Course- related items must be required of all students in the course of instruction.
 Student loan interest deduction. Total costs of attending an eligible educational institution, including graduate school (however, limitations may apply to the cost of room and board allowed).
 Tuition and fees deduction. Tuition and certain related expenses required for enrollment or attendance at an eligible educational institution. Student-activity fees and expenses for course-related books, supplies, and equipment are included only if the fees and expenses must be paid to the institution as a condition of enrollment or attendance.
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Recapture:(p82)

rule
To include as income on your current year's return an amount allowed as a credit or deduction in a prior year.
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Rollover:(p82)

rule
A tax-free distribution to you of cash or other assets from a tax-favored plan that you contribute to another tax-favored plan.
taxmap/pubs/p970-056.htm#en_us_publink1000178791

Transfer:(p82)

rule
A movement of funds in a tax-favored plan from one trustee directly to another, either at your request or at the trustee's request.