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Publication 970
taxmap/pubs/p970-010.htm#en_us_publink1000204406

Illustrated Example(p18)

rule
Bill Pass, age 28 and a single taxpayer, enrolled full-time at a local college to earn a degree in law enforcement. This is the first year of his postsecondary education. During 2011, he paid $5,600 for his qualified 2011 tuition. He received Form 1098-T (shown on the next page) from the college. He and the college meet all of the requirements for the American opportunity credit. Bill's MAGI is $57,000. His income tax liability, before credits, is $8,106. Bill claims no credits other than the American opportunity credit. He figures his American opportunity credit of $2,500, of which $1,000 is refundable, as shown on the Form 8863, later.
Note. In Appendix A, Illustrated Example of Education Credits at the end of this publication, there is an example illustrating the use of Form 8863 when both the American opportunity credit and the lifetime learning credit are claimed on the same tax return.
taxmap/pubs/p970-010.htm#en_us_publink1000236011

taxmap/pubs/p970-010.htm#en_us_publink1000236014
Credit Limit Worksheet—Form 8863, Line 23
Nonrefundable lifetime learning credit
1.Enter the amount from Form 8863, line 221.
2.Enter the amount from Form 1040, line 46, or Form 1040A, line 28 2.  
3.Enter the total, if any, of your credits from:     
 Form 1040, lines 47, 48, and the amount from Schedule R entered on line 53 Right brace3.  
 Form 1040A, lines 29 and 30  
4.Subtract line 3 from line 24.
5.Nonrefundable lifetime learning credit. Enter the smaller of line 1 or line 4 5.
Nonrefundable American opportunity credit
6.Enter the amount from Form 8863, line 156.1,500  
7.Enter the amount from Form 1040, line 46, or Form 1040A, line 28 7.8,106    
8.Enter the total, if any, of your credits from:     
 Form 1040, lines 47, 48, and the amount from Schedule R entered on line 53, and the amount from line 5 above Right brace8.0    
 Form 1040A, lines 29 and 30, and the amount from line 5 above  
9.Subtract line 8 from line 79.8,106  
10.Nonrefundable American opportunity credit. Enter the smaller of line 6 or line 9 10.1,500  
11.Nonrefundable education credits. Add line 5 and line 10. Enter here and on Form 8863, line 23 11.1,500  


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