A Walkthrough of Form 8863 for Education Tax Credits

💼Form 8863 is used to claim the American Opportunity tax credit and the Lifetime Learning credit for education expenses.

💰The American Opportunity tax credit is a more favorable credit because it is larger and has a refundable component.

🎓The American Opportunity tax credit covers only the first four years of postsecondary education, while the Lifetime Learning credit has no limit.

🧮The maximum amount of the American Opportunity tax credit is $2,500 per student, and it can be claimed for each eligible student.

💸The income phase-out for the American Opportunity tax credit is $160,000 to $180,000 for married filing joint, beyond which the credit is not allowed.

What is Form 8863 used for?

—Form 8863 is used to claim the American Opportunity tax credit and the Lifetime Learning credit for education expenses.

What is the difference between the American Opportunity tax credit and the Lifetime Learning credit?

—The American Opportunity tax credit is a larger credit and has a refundable component, while the Lifetime Learning credit is non-refundable and covers a broader range of education expenses.

How many years can the American Opportunity tax credit be claimed?

—The American Opportunity tax credit can be claimed for the first four years of postsecondary education.

What is the maximum amount of the American Opportunity tax credit?

—The maximum amount of the American Opportunity tax credit is $2,500 per eligible student.

What is the income phase-out for the American Opportunity tax credit?

—The income phase-out for the American Opportunity tax credit is $160,000 to $180,000 for married filing joint.

00:02This video is a walkthrough of Form 8863 for Education Tax Credits for the 2023 tax year.

02:40The American Opportunity tax credit is a more favorable credit because it is larger and has a refundable component.

06:18The American Opportunity tax credit covers only the first four years of postsecondary education, while the Lifetime Learning credit has no limit.

08:49The maximum amount of the American Opportunity tax credit is $2,500 per student, and it can be claimed for each eligible student.

10:45The income phase-out for the American Opportunity tax credit is $160,000 to $180,000 for married filing joint, beyond which the credit is not allowed.