Form 8863 is used to figure and claim education credits, either the American Opportunity Credit or the Lifetime Learning Credit. These credits are based on adjusted qualified education expenses paid to an eligible postsecondary educational institution and are limited based on Modified Adjusted Gross Income (MAGI).
Eligible institutions are required by the IRS to send Form 1098-T to students by January 31st, however some institutions may not be required to furnish the student with Form 1098-T if the student:
- was a qualified nonresident alien,
- had their qualified education expenses paid entirely with scholarships,
- had their qualified education expenses paid under a formal billing arrangement, or
- was enrolled only in courses for which no academic credit is awarded.
Taxpayers and students should reach out to the institution if they do not receive the form by the due date, however not having received Form 1098-T doesn't disqualify the student from claiming an education credit.
If the student didn't receive Form 1098-T and there is any question regarding whether the school is an eligible institution, refer the US Department of Education lists of eligible institutions linked in the Additional Information below.
You will need to have verifiable documentation of expenses being claimed and of funds received reducing education costs plus scholarships and grants. If the taxpayer has qualified expenses not included on Form 1098-T, you can include them on Form 8863.
Before completing Form 8863, be sure you have entered all income and adjustments in the return.
To complete Form 8863 in TaxSlayer ProWeb, from the Federal Section of the tax return select:
- Deductions
- Credits
- Education Credits - Select the eligible student from the list, then click Continue.
- Did the student receive Form 1098-T from the educational institution for 20xx? - Select Yes or No as appropriate.
-
Did the student receive Form 1098-T from this institution for 2023 with box 7 checked? - Select Yes or No as appropriate, then click Continue.
Note that if you need to return to these questions to revise an answer after having completed the remaining steps, you'll need to delete the educational institution(s) entered.) - Enter the educational institution's EIN, name, and address, then click Continue.
- Tuition Paid - Enter the amount of tuition paid as indicated on Form 1098-T Box 1.
- Grants and Scholarships - Enter the amount of scholarships or grants received as indicated on Form 1098-T Box 5.
- Other Qualified Expenses - Enter any other expenses that qualify and are not already included on Form 1098-T Box 1. Click Continue when finished to return to the institutions menu. If you have another 1098-T from another institution, select + Add Another Institution to enter it.
- Answer the four qualifying questions to determine eligibility, then click Continue.
ProWeb will use your entries to determine the best credit based on taxpayer's situation. You can choose which credit to use, or to not claim a credit, as desired.
Caveat: Only one type of credit can be claimed per student per year.
Note: This is a guide to entering education expenses into TaxSlayer ProWeb. This is not intended as tax advice.
Additional Information:
About Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)
US Dept of Education: Database of Accredited Postsecondary Institutions and Programs
US Dept of Education: International Schools That Participate in the Federal Student Loan Programs