Publication 970 - Tax Benefits for Education

Publication 970

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Judy Green, a single taxpayer, is taking courses at a community college to be recertified to teach in public schools. Her MAGI is $27,000. Her tax, before credits, is $2,234. She claims no credits other than the lifetime learning credit. In July 2011 she paid $700 for the summer 2011 semester; in August 2011 she paid $1,900 for the fall 2011 semester; and in December 2011 she paid another $1,900 for the spring semester beginning January 2012. She received Form 1098-T (shown later) from the college. Judy and the college meet all the requirements for the lifetime learning credit. She can use all of the $4,500 tuition she paid in 2011 when figuring her credit for her 2011 tax return. She figures her credit as shown on the filled-in 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.

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Filled-in Form 1098-T Green

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Credit Limit Worksheet—Form 8863, Line 23

Nonrefundable lifetime learning credit
1.	Enter the amount from Form 8863, line 22				1.	900
2.	Enter the amount from Form 1040, line 46, or Form 1040A, line 28		2.	2,234
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	3.	0
	•	Form 1040A, lines 29 and 30	3.	0
4.	Subtract line 3 from line 2				4.	2,234
5.	Nonrefundable lifetime learning credit. Enter the smaller of line 1 or line 4				5.	900
Nonrefundable American opportunity credit
6.	Enter the amount from Form 8863, line 15				6.	0
7.	Enter the amount from Form 1040, line 46, or Form 1040A, line 28		7.
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	8.	0
	•	Form 1040A, lines 29 and 30, and the amount from line 5 above	8.	0
9.	Subtract line 8 from line 7				9.
10.	Nonrefundable American opportunity credit. Enter the smaller of line 6 or line 9				10.	0
11.	Nonrefundable education credits. Add line 5 and line 10. Enter here and on Form 8863, line 23				11.	900

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Form 8863 for Judy Green

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Form 8863 (page 2) for Judy Green

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Illustrated Example(p25)