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Fillable 1040x Form

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Fillable 1040x Form

Fillable 1040x form Publication 556 - Introductory Material Table of Contents The IRS Mission Reminders IntroductionOrdering forms and publications. Fillable 1040x form Tax questions. Fillable 1040x form Useful Items - You may want to see: The IRS Mission Provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all. Fillable 1040x form Reminders Penalty for filing erroneous claim for refund or credit. Fillable 1040x form  You may have to pay a penalty if you file an erroneous claim for refund or credit. Fillable 1040x form See Penalty for erroneous claim for refund, later under Claims for Refund. Fillable 1040x form Interest and penalties suspended if notice not mailed within 36 months. Fillable 1040x form  If you file your return timely (including extensions), interest and certain penalties will be suspended if the IRS does not mail a notice to you within 36 months. Fillable 1040x form See Suspension of interest and penalties, later under Examination of Returns. Fillable 1040x form Fast track mediation. Fillable 1040x form  The IRS offers fast track mediation services to help taxpayers resolve many disputes resulting from: Examinations (audits), Offers in compromise, Trust fund recovery penalties, and Other collection actions. Fillable 1040x form See Fast track mediation under If You Do Not Agree. Fillable 1040x form Introduction The Internal Revenue Service (IRS) accepts most federal tax returns as filed. Fillable 1040x form However, the IRS examines (or audits) some returns to determine if income, expenses, and credits are being reported accurately. Fillable 1040x form If your return is selected for examination, it does not suggest that you made an error or are dishonest. Fillable 1040x form Returns are chosen by computerized screening, by random sample, or by an income document matching program. Fillable 1040x form See Examination selection criteria, later. Fillable 1040x form You should also know that many examinations result in a refund or acceptance of the tax return without change. Fillable 1040x form This publication discusses general rules and procedures that the IRS follows in examinations. Fillable 1040x form It explains what happens during an examination and your appeal rights, both within the IRS and in the federal court system. Fillable 1040x form It also explains how to file a claim for refund of tax you already paid. Fillable 1040x form As a taxpayer, you have the right to be treated fairly, professionally, promptly, and courteously by IRS employees. Fillable 1040x form Publication 1, Your Rights as a Taxpayer, explains your rights when dealing with the IRS. Fillable 1040x form Comments and suggestions. Fillable 1040x form   We welcome your comments about this publication and your suggestions for future editions. Fillable 1040x form   You can write to us at the following address:  Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Fillable 1040x form NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Fillable 1040x form Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Fillable 1040x form   You can send your comments from www. Fillable 1040x form irs. Fillable 1040x form gov/formspubs/. Fillable 1040x form Click on “More Information” and then on “Comment on Tax Forms and Publications. Fillable 1040x form ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Fillable 1040x form Ordering forms and publications. Fillable 1040x form   Visit www. Fillable 1040x form irs. Fillable 1040x form gov/formspubs to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Fillable 1040x form  Internal Revenue Service  1201 N. Fillable 1040x form Mitsubishi Motorway Bloomington, IL 61704-6613 Tax questions. Fillable 1040x form   If you have a tax question, check the information available on www. Fillable 1040x form irs. Fillable 1040x form gov or call 1-800-829-1040. Fillable 1040x form We cannot answer tax questions sent to either of the above addresses. Fillable 1040x form Useful Items - You may want to see: Publication 1 Your Rights as a Taxpayer 5 Your Appeal Rights and How To Prepare a Protest If You Don't Agree 547 Casualties, Disasters, and Thefts 594 The IRS Collection Process 910 Guide to Free Tax Services 971 Innocent Spouse Relief 1546 Taxpayer Advocate Service–Your Voice at the IRS 1660 Collection Appeal Rights 3605 Fast Track Mediation 3920 Tax Relief for Victims of Terrorist Attacks 4134 Low Income Taxpayer Clinic List Form (and Instructions) 843 Claim for Refund and Request for Abatement 911 Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order) 1040X Amended U. Fillable 1040x form S. Fillable 1040x form Individual Income Tax Return 2848 Power of Attorney and Declaration of Representative 4506 Request for Copy of Tax Return 4506-T Request for Transcript of Tax Return 8379 Injured Spouse Allocation 8857 Request for Innocent Spouse Relief See How To Get Tax Help , near the end of this publication, for information about getting these publications and forms. Fillable 1040x form Prev  Up  Next   Home   More Online Publications
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    The Fillable 1040x Form

    Fillable 1040x form 3. Fillable 1040x form   Lifetime Learning Credit Table of Contents Introduction Can You Claim the CreditWho Can Claim the Credit Who Cannot Claim the Credit What Expenses QualifyQualified Education Expenses No Double Benefit Allowed Expenses That Do Not Qualify Who Is an Eligible Student Who Can Claim a Dependent's Expenses Figuring the CreditEffect of the Amount of Your Income on the Amount of Your Credit Claiming the Credit Introduction For 2013, there are two tax credits available to help you offset the costs of higher education by reducing the amount of your income tax. Fillable 1040x form They are the American opportunity credit and the lifetime learning credit. Fillable 1040x form This chapter discusses the lifetime learning credit. Fillable 1040x form The American opportunity credit is discussed in chapter 2, The American Opportunity Credit . Fillable 1040x form This chapter explains: Who can claim the lifetime learning credit, What expenses qualify for the credit, Who is an eligible student, Who can claim a dependent's expenses, How to figure the credit, How to claim the credit, and When the credit must be repaid. Fillable 1040x form What is the tax benefit of the lifetime learning credit. Fillable 1040x form   For the tax year, you may be able to claim a lifetime learning credit of up to $2,000 for qualified education expenses paid for all eligible students. Fillable 1040x form There is no limit on the number of years the lifetime learning credit can be claimed for each student. Fillable 1040x form   A tax credit reduces the amount of income tax you may have to pay. Fillable 1040x form Unlike a deduction, which reduces the amount of income subject to tax, a credit directly reduces the tax itself. Fillable 1040x form The lifetime learning credit is a nonrefundable credit. Fillable 1040x form This means that it can reduce your tax to zero, but if the credit is more than your tax the excess will not be refunded to you. Fillable 1040x form   Your allowable lifetime learning credit may be limited by the amount of your income and the amount of your tax. Fillable 1040x form Can you claim more than one education credit this year. Fillable 1040x form   For each student, you can elect for any year only one of the credits. Fillable 1040x form For example, if you elect to take the lifetime learning credit for a child on your 2013 tax return, you cannot, for that same child, also claim the American opportunity credit for 2013. Fillable 1040x form   If you are eligible to claim the lifetime learning credit and you are also eligible to claim the American opportunity credit for the same student in the same year, you can choose to claim either credit, but not both. Fillable 1040x form   If you pay qualified education expenses for more than one student in the same year, you can choose to take certain credits on a per-student, per-year basis. Fillable 1040x form This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year. Fillable 1040x form Differences between the American opportunity and lifetime learning credits. Fillable 1040x form   There are several differences between these two credits. Fillable 1040x form For example, you can claim the American opportunity credit for the same student for no more than 4 tax years, but any year in which the Hope Scholarship Credit was claimed counts toward the 4 years. Fillable 1040x form However, there is no limit on the number of years for which you can claim a lifetime learning credit based on the same student's expenses. Fillable 1040x form The differences between these credits are shown in Appendix B, Highlights of Education Tax Benefits for Tax Year 2013 near the end of this publication. Fillable 1040x form Overview of the lifetime learning credit. Fillable 1040x form   See Table 3-1, Overview of the Lifetime Learning Credit for the basics of the lifetime learning credit. Fillable 1040x form The details are discussed in this chapter. Fillable 1040x form Can You Claim the Credit The following rules will help you determine if you are eligible to claim the lifetime learning credit on your tax return. Fillable 1040x form Who Can Claim the Credit Generally, you can claim the lifetime learning credit if all three of the following requirements are met. Fillable 1040x form You pay qualified education expenses of higher education. Fillable 1040x form You pay the education expenses for an eligible student. Fillable 1040x form The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. Fillable 1040x form Table 3-1. Fillable 1040x form Overview of the Lifetime Learning Credit Maximum credit Up to $2,000 credit per return Limit on modified adjusted gross income (MAGI) $127,000 if married filling jointly;  $63,000 if single, head of household, or qualifying widow(er) Refundable or nonrefundable Nonrefundable—credit limited to the amount of tax you must pay on your taxable income Number of years of postsecondary education Available for all years of postsecondary education and for courses to acquire or improve job skills Number of tax years credit available Available for an unlimited number of years Type of program required Student does not need to be pursuing a program leading to a degree or other recognized education credential Number of courses Available for one or more courses Felony drug conviction Felony drug convictions do not make the student ineligible Qualified expenses Tuition and fees required for enrollment or attendance (including amounts required to be paid to the institution for course-related books, supplies, and equipment) Payments for academic periods Payments made in 2013 for academic periods beginning in 2013 or beginning in the first 3 months of 2014 Note. Fillable 1040x form Qualified education expenses paid by a dependent for whom you claim an exemption, or by a third party for that dependent, are considered paid by you. Fillable 1040x form “Qualified education expenses” are defined later under Qualified Education Expenses . Fillable 1040x form “Eligible students” are defined later under Who Is an Eligible Student . Fillable 1040x form A dependent for whom you claim an exemption is defined later under Who Can Claim a Dependent's Expenses . Fillable 1040x form You may find Figure 3-1, Can You Claim the Lifetime Learning Credit for 2013 , later, helpful in determining if you can claim a lifetime learning credit on your tax return. Fillable 1040x form Who Cannot Claim the Credit You cannot claim the lifetime learning credit for 2013 if any of the following apply. Fillable 1040x form Your filing status is married filing separately. Fillable 1040x form You are listed as a dependent on another person's tax return (such as your parents'). Fillable 1040x form See Who Can Claim a Dependent's Expenses , later. Fillable 1040x form Your modified adjusted gross income (MAGI) is $63,000 or more ($127,000 or more in the case of a joint return). Fillable 1040x form MAGI is explained later under Effect of the Amount of Your Income on the Amount of Your Credit . Fillable 1040x form You (or your spouse) were a nonresident alien for any part of 2013 and the nonresident alien did not elect to be treated as a resident alien for tax purposes. Fillable 1040x form More information on nonresident aliens can be found in Publication 519. Fillable 1040x form You claim the American Opportunity Credit (see chapter 2) or a Tuition and Fees Deduction (see chapter 6) for the same student in 2013. Fillable 1040x form What Expenses Qualify The lifetime learning credit is based on qualified education expenses you pay for yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. Fillable 1040x form Generally, the credit is allowed for qualified education expenses paid in 2013 for an academic period beginning in 2013 or in the first 3 months of 2014. Fillable 1040x form For example, if you paid $1,500 in December 2013 for qualified tuition for the spring 2014 semester beginning in January 2014, you may be able to use that $1,500 in figuring your 2013 credit. Fillable 1040x form Academic period. Fillable 1040x form   An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. Fillable 1040x form In the case of an educational institution that uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. Fillable 1040x form Paid with borrowed funds. Fillable 1040x form   You can claim a lifetime learning credit for qualified education expenses paid with the proceeds of a loan. Fillable 1040x form You use the expenses to figure the lifetime learning credit for the year in which the expenses are paid, not the year in which the loan is repaid. Fillable 1040x form Treat loan disbursements sent directly to the educational institution as paid on the date the institution credits the student's account. Fillable 1040x form Student withdraws from class(es). Fillable 1040x form   You can claim a lifetime learning credit for qualified education expenses not refunded when a student withdraws. Fillable 1040x form Qualified Education Expenses For purposes of the lifetime learning credit, qualified education expenses are tuition and certain related expenses required for enrollment in a course at an eligible educational institution. Fillable 1040x form The course must be either part of a postsecondary degree program or taken by the student to acquire or improve job skills. Fillable 1040x form Eligible educational institution. Fillable 1040x form   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. Fillable 1040x form S. Fillable 1040x form Department of Education. Fillable 1040x form It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Fillable 1040x form The educational institution should be able to tell you if it is an eligible educational institution. Fillable 1040x form   Certain educational institutions located outside the United States also participate in the U. Fillable 1040x form S. Fillable 1040x form Department of Education's Federal Student Aid (FSA) programs. Fillable 1040x form Related expenses. Fillable 1040x form   Student-activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses only if the fees and expenses must be paid to the institution for enrollment or attendance. Fillable 1040x form Prepaid expenses. Fillable 1040x form   Qualified education expenses paid in 2013 for an academic period that begins in the first three months of 2014 can be used in figuring an education credit for 2013 only. Fillable 1040x form See Academic period , earlier. Fillable 1040x form For example, you pay $2,000 in December 2013 for qualified tuition for the 2014 winter quarter that begins in January 2014, you can use that $2,000 in figuring an education credit for 2013 only (if you meet all the other requirements). Fillable 1040x form You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 education credit(s). Fillable 1040x form In the following examples, assume that each student is an eligible student at an eligible educational institution. Fillable 1040x form Example 1. Fillable 1040x form   Jackson is a sophomore in University V's degree program in dentistry. Fillable 1040x form This year, in addition to tuition, he is required to pay a fee to the university for the rental of the dental equipment he will use in this program. Fillable 1040x form Because the equipment rental fee must be paid to University V for enrollment and attendance, Jackson's equipment rental fee is a qualified expense. Fillable 1040x form Example 2. Fillable 1040x form   Donna and Charles, both first-year students at College W, are required to have certain books and other reading materials to use in their mandatory first-year classes. Fillable 1040x form The college has no policy about how students should obtain these materials, but any student who purchases them from College W's bookstore will receive a bill directly from the college. Fillable 1040x form Charles bought his books from a friend, so what he paid for them is not a qualified education expense. Fillable 1040x form Donna bought hers at College W's bookstore. Fillable 1040x form Although Donna paid College W directly for her first-year books and materials, her payment is not a qualified expense because the books and materials are not required to be purchased from College W for enrollment or attendance at the institution. Fillable 1040x form Example 3. Fillable 1040x form   When Marci enrolled at College X for her freshman year, she had to pay a separate student activity fee in addition to her tuition. Fillable 1040x form This activity fee is required of all students, and is used solely to fund on-campus organizations and activities run by students, such as the student newspaper and student government. Fillable 1040x form No portion of the fee covers personal expenses. Fillable 1040x form Although labeled as a student activity fee, the fee is required for Marci's enrollment and attendance at College X. Fillable 1040x form Therefore, it is a qualified expense. Fillable 1040x form No Double Benefit Allowed You cannot do any of the following: Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim a lifetime learning credit based on those same expenses. Fillable 1040x form Claim a lifetime learning credit in the same year that you are claiming a tuition and fees deduction for the same student. Fillable 1040x form Claim a lifetime learning credit and an American opportunity credit based on the same qualified education expenses. Fillable 1040x form Claim a lifetime learning credit based on the same expenses used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or qualified tuition program (QTP). Fillable 1040x form See Coordination With American Opportunity and Lifetime Learning Credits in chapter 7, Coverdell Education Savings Account, and Coordination With American Opportunity and Lifetime Learning Credits in chapter 8, Qualified Tuition Program. Fillable 1040x form Claim a credit based on qualified education expenses paid with tax-free educational assistance, such as a scholarship, grant, or assistance provided by an employer. Fillable 1040x form See Adjustments to Qualified Education Expenses, next. Fillable 1040x form This image is too large to be displayed in the current screen. Fillable 1040x form Please click the link to view the image. Fillable 1040x form Figure 3-1 Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid by or on behalf of that student under the following rules. Fillable 1040x form The result is the amount of adjusted qualified education expenses for each student. Fillable 1040x form Tax-free educational assistance. Fillable 1040x form   For tax-free educational assistance received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. Fillable 1040x form See Academic period , earlier. Fillable 1040x form   Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. Fillable 1040x form This tax-free educational assistance is any tax-free educational assistance received by you or anyone else after 2013 for qualified education expenses paid on behalf of a student in 2013 (or attributable to enrollment at an eligible educational institution during 2013). Fillable 1040x form   If this tax-free educational assistance is received after 2013 but before you file your 2013 income tax return, see Refunds received after 2013 but before your income tax return is filed , later. Fillable 1040x form If this tax-free educational assistance is received after 2013 and after you file your 2013 income tax return, see Refunds received after 2013 and after your income tax return is filed , later. Fillable 1040x form   Tax-free educational assistance includes: The tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Fillable 1040x form Generally, any scholarship or fellowship is treated as tax free. Fillable 1040x form However, a scholarship or fellowship is not treated as tax free to the extent the student includes it in gross income (if the student is required to file a tax return for the year the scholarship or fellowship is received) and either of the following is true. Fillable 1040x form The scholarship or fellowship (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Fillable 1040x form The scholarship or fellowship (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Fillable 1040x form You may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year it is received. Fillable 1040x form For examples, see Coordination with Pell grants and other scholarships, later. Fillable 1040x form Refunds. Fillable 1040x form   A refund of qualified education expenses may reduce adjusted qualified education expenses for the tax year or require repayment (recapture) of a credit claimed in an earlier year. Fillable 1040x form Some tax-free educational assistance received after 2013 may be treated as a refund. Fillable 1040x form See Tax-free educational assistance , earlier. Fillable 1040x form Refunds received in 2013. Fillable 1040x form   For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses for 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. Fillable 1040x form Refunds received after 2013 but before your income tax return is filed. Fillable 1040x form   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid before you file an income tax return for 2013, the amount of qualified education expenses for 2013 is reduced by the amount of the refund. Fillable 1040x form Refunds received after 2013 and after your income tax return is filed. Fillable 1040x form   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid after you file an income tax return for 2013, you may need to repay some or all of the credit. Fillable 1040x form See Credit recapture, next. Fillable 1040x form Credit recapture. Fillable 1040x form    If any tax-free educational assistance for the qualified education expenses paid in 2013 or any refund of your qualified education expenses paid in 2013 is received after you file your 2013 income tax return, you must recapture (repay) any excess credit. Fillable 1040x form You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing the expenses by the amount of the refund or tax-free educational assistance. Fillable 1040x form You then refigure your education credit(s) for 2013 and figure the amount by which your 2013 tax liability would have increased if you had claimed the refigured credit(s). Fillable 1040x form Include that amount as an additional tax for the year the refund or tax-free assistance was received. Fillable 1040x form Example. Fillable 1040x form   You pay $9,300 in tuition and fees in December 2013, and your child began college in January 2014. Fillable 1040x form You filed your 2013 tax return on February 14, 2014, and claimed a lifetime learning credit of $1,860. Fillable 1040x form You claimed no other tax credits. Fillable 1040x form After you filed your return, your child withdrew from two courses and you received a refund of $2,900. Fillable 1040x form You must refigure your 2013 lifetime learning credit using $6,400 of qualified education expenses instead of $9,300. Fillable 1040x form The refigured credit is $1,280 and your tax liability increased by $580. Fillable 1040x form See instructions for your 2014 income tax return to determine where to include this tax. Fillable 1040x form If you pay qualified education expenses in 2014 for an academic period that begins in the first 3 months of 2014 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2014 instead of reducing your expenses for 2013. Fillable 1040x form Amounts that do not reduce qualified education expenses. Fillable 1040x form   Do not reduce qualified education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. Fillable 1040x form   Do not reduce the qualified education expenses by any scholarship or fellowship reported as income on the student's tax return in the following situations. Fillable 1040x form The use of the money is restricted, by the terms of the scholarship or fellowship, to costs of attendance (such as room and board) other than qualified education expenses, as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Fillable 1040x form The use of the money is not restricted. Fillable 1040x form For examples, see Adjustments to Qualified Education Expenses in chapter 2, American Opportunity Credit. Fillable 1040x form Coordination with Pell grants and other scholarships. Fillable 1040x form   In some cases, you may be able to reduce your tax liability by including scholarships in income. Fillable 1040x form If you are claiming an education credit for a claimed dependent who received a scholarship, you may be able to reduce your tax liability if the student includes the scholarship in income. Fillable 1040x form The scholarship must be one that may (by its terms) be applied to expenses (such as room and board) other than qualified education expenses. Fillable 1040x form Example 1—No scholarship. Fillable 1040x form Judy Green, who is unmarried, is taking courses at a public community college to be recertified to teach in public schools. Fillable 1040x form Her AGI and her MAGI, for purposes of the credit, are $27,000. Fillable 1040x form Judy takes the standard deduction of $5,950 and personal exemption of $3,800, reducing her AGI to taxable income of $17,250 and her tax before credits is $2,156. Fillable 1040x form She claims no credits other than the lifetime learning credit. Fillable 1040x form In July 2013 she paid $700 for the summer 2013 semester; in August 2013 she paid $1,900 for the fall 2013 semester; and in December 2013 she paid another $1,900 for the spring semester beginning in January 2014. Fillable 1040x form Judy and the college meet all requirements for the lifetime learning tax credit. Fillable 1040x form She can use all of the $4,500 tuition she paid in 2013 when figuring her 2013 lifetime learning credit. Fillable 1040x form She claims a $900 lifetime learning credit and her tax after credits is $1,256. Fillable 1040x form Example 2—Scholarship excluded from income. Fillable 1040x form The facts are the same as in Example 1—No scholarship, except that Judy was awarded a $1,500 scholarship. Fillable 1040x form Under the terms of her scholarship, it may be used to pay any educational expenses, including room and board. Fillable 1040x form If Judy excludes the scholarship from income, she will be deemed (for purposes of computing her education credit) as having used the scholarship to pay for tuition, required fees, and course materials. Fillable 1040x form Only $3,000 of the $4,500 tuition she paid in 2013 could be used when figuring her 2013 lifetime learning credit. Fillable 1040x form Her lifetime learning credit would be reduced to $600 and her tax after credits would be $1,556. Fillable 1040x form Example 3—Scholarship included in income. Fillable 1040x form The facts are the same as in Example 2—Scholarship excluded from income. Fillable 1040x form If, unlike Example 2, Judy includes the $1,500 scholarship in income, she will be deemed to have used the entire scholarship to pay for room and board. Fillable 1040x form Judy's AGI will increase to $28,500, her taxable income would be $18,750, and her tax before credits would be $2,381. Fillable 1040x form She would be able to use the $4,500 of adjusted qualified education expenses to figure her credit. Fillable 1040x form Judy could claim a $900 lifetime learning credit and her tax after credits would be $1,481. Fillable 1040x form Expenses That Do Not Qualify Qualified education expenses do not include amounts paid for: Insurance, Medical expenses (including student health fees), Room and board, Transportation, or Similar personal, living, or family expenses. Fillable 1040x form This is true even if the amount must be paid to the institution as a condition of enrollment or attendance. Fillable 1040x form Sports, games, hobbies, and noncredit courses. Fillable 1040x form   Qualified education expenses generally do not include expenses that relate to any course of instruction or other education that involves sports, games or hobbies, or any noncredit course. Fillable 1040x form However, if the course of instruction or other education is part of the student's degree program or is taken by the student to acquire or improve job skills, these expenses can qualify. Fillable 1040x form Comprehensive or bundled fees. Fillable 1040x form   Some eligible educational institutions combine all of their fees for an academic period into one amount. Fillable 1040x form If you do not receive or do not have access to an allocation showing how much you paid for qualified education expenses and how much you paid for personal expenses, such as those listed above, contact the institution. Fillable 1040x form The institution is required to make this allocation and provide you with the amount you paid (or were billed) for qualified education expenses on Form 1098-T. Fillable 1040x form See Figuring the Credit , later, for more information about Form 1098-T. Fillable 1040x form Who Is an Eligible Student For purposes of the lifetime learning credit, an eligible student is a student who is enrolled in one or more courses at an eligible educational institution (as defined under Qualified Education Expenses , earlier). Fillable 1040x form Who Can Claim a Dependent's Expenses If there are qualified education expenses for your dependent during a tax year, either you or your dependent, but not both of you, can claim a lifetime learning credit for your dependent's expenses for that year. Fillable 1040x form For you to claim a lifetime learning credit for your dependent's expenses, you must also claim an exemption for your dependent. Fillable 1040x form You do this by listing your dependent's name and other required information on Form 1040 (or Form 1040A), line 6c. Fillable 1040x form IF you. Fillable 1040x form . Fillable 1040x form . Fillable 1040x form THEN only. Fillable 1040x form . Fillable 1040x form . Fillable 1040x form claim an exemption on your tax return for a dependent who is an eligible student you can claim the lifetime learning credit based on that dependent's expenses. Fillable 1040x form The dependent cannot claim the credit. Fillable 1040x form do not claim an exemption on your tax return for a dependent who is an eligible student (even if entitled to the exemption) the dependent can claim the lifetime learning credit. Fillable 1040x form You cannot claim the credit based on this dependent's expenses. Fillable 1040x form Expenses paid by dependent. Fillable 1040x form   If you claim an exemption on your tax return for an eligible student who is your dependent, treat any expenses paid (or deemed paid) by your dependent as if you had paid them. Fillable 1040x form Include these expenses when figuring the amount of your lifetime learning credit. Fillable 1040x form    Qualified education expenses paid directly to an eligible educational institution for your dependent under a court-approved divorce decree are treated as paid by your dependent. Fillable 1040x form Expenses paid by you. Fillable 1040x form   If you claim an exemption for a dependent who is an eligible student, only you can include any expenses you paid when figuring the amount of the lifetime learning credit. Fillable 1040x form If neither you nor anyone else claims an exemption for the dependent, only the dependent can include any expenses you paid when figuring the lifetime learning credit. Fillable 1040x form Expenses paid by others. Fillable 1040x form   Someone other than you, your spouse, or your dependent (such as a relative or former spouse) may make a payment directly to an eligible educational institution to pay for an eligible student's qualified education expenses. Fillable 1040x form In this case, the student is treated as receiving the payment from the other person and, in turn, paying the institution. Fillable 1040x form If you claim an exemption on your tax return for the student, you are considered to have paid the expenses. Fillable 1040x form Example. Fillable 1040x form In 2013, Ms. Fillable 1040x form Allen makes a payment directly to an eligible educational institution for her grandson Todd's qualified education expenses. Fillable 1040x form For purposes of claiming a lifetime learning credit, Todd is treated as receiving the money from his grandmother and, in turn, paying his qualified education expenses himself. Fillable 1040x form Unless an exemption for Todd is claimed on someone else's 2013 tax return, only Todd can use the payment to claim a lifetime learning credit. Fillable 1040x form If anyone, such as Todd's parents, claims an exemption for Todd on his or her 2013 tax return, whoever claims the exemption may be able to use the expenses to claim a lifetime learning credit. Fillable 1040x form If anyone else claims an exemption for Todd, Todd cannot claim a lifetime learning credit. Fillable 1040x form Tuition reduction. Fillable 1040x form   When an eligible educational institution provides a reduction in tuition to an employee of the institution (or spouse or dependent child of an employee), the amount of the reduction may or may not be taxable. Fillable 1040x form If it is taxable, the employee is treated as receiving a payment of that amount and, in turn, paying it to the educational institution on behalf of the student. Fillable 1040x form For more information on tuition reductions, see Qualified Tuition Reduction in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Fillable 1040x form Figuring the Credit The amount of the lifetime learning credit is 20% of the first $10,000 of qualified education expenses you paid for all eligible students. Fillable 1040x form The maximum amount of lifetime learning credit you can claim for 2013 is $2,000 (20% × $10,000). Fillable 1040x form However, that amount may be reduced based on your MAGI. Fillable 1040x form See Effect of the Amount of Your Income on the Amount of Your Credit , later. Fillable 1040x form Example. Fillable 1040x form Bruce and Toni Harper are married and file a joint tax return. Fillable 1040x form For 2013, their MAGI is $75,000. Fillable 1040x form Toni is attending a local college (an eligible educational institution) to earn credits toward a degree in nursing. Fillable 1040x form She already has a bachelor's degree in history and wants to become a nurse. Fillable 1040x form In August 2013, Toni paid $5,000 of qualified education expenses for her fall 2013 semester. Fillable 1040x form Bruce and Toni can claim a $1,000 (20% × $5,000) lifetime learning credit on their 2013 joint tax return. Fillable 1040x form Form 1098-T. Fillable 1040x form   To help you figure your lifetime learning credit, the student should receive Form 1098-T. Fillable 1040x form Generally, an eligible educational institution (such as a college or university) must send Form 1098-T (or acceptable substitute) to each enrolled student by January 31, 2014. Fillable 1040x form An institution may choose to report either payments received (box 1), or amounts billed (box 2), for qualified education expenses. Fillable 1040x form However, the amounts in boxes 1 and 2 of Form 1098-T might be different from what you paid. Fillable 1040x form When figuring the credit, use only the amounts you paid or are deemed to have paid in 2013 for qualified education expenses. Fillable 1040x form   In addition, Form 1098-T should give other information for that institution, such as adjustments made for prior years, the amount of scholarships or grants, reimbursements or refunds, and whether the student was enrolled at least half-time or was a graduate student. Fillable 1040x form    The eligible educational institution may ask for a completed Form W-9S, or similar statement to obtain the student's name, address, and taxpayer identification number. Fillable 1040x form Effect of the Amount of Your Income on the Amount of Your Credit The amount of your lifetime learning credit is phased out (gradually reduced) if your MAGI is between $53,000 and $63,000 ($107,000 and $127,000 if you file a joint return). Fillable 1040x form You cannot claim a lifetime learning credit if your MAGI is $63,000 or more ($127,000 or more if you file a joint return). Fillable 1040x form Modified adjusted gross income (MAGI). Fillable 1040x form   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return. Fillable 1040x form MAGI when using Form 1040A. Fillable 1040x form   If you file Form 1040A, your MAGI is the AGI on line 22 of that form. Fillable 1040x form MAGI when using Form 1040. Fillable 1040x form   If you file Form 1040, your MAGI is the AGI on line 38 of that form, modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. Fillable 1040x form You can use Worksheet 3-1 to figure your MAGI. Fillable 1040x form Worksheet 3-1. Fillable 1040x form MAGI for the Lifetime Learning Credit 1. Fillable 1040x form Enter your adjusted gross income  (Form 1040, line 38)   1. Fillable 1040x form   2. Fillable 1040x form Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)   2. Fillable 1040x form       3. Fillable 1040x form Enter your foreign housing deduction (Form 2555, line 50)   3. Fillable 1040x form       4. Fillable 1040x form Enter the amount of income from Puerto Rico you are excluding   4. Fillable 1040x form       5. Fillable 1040x form Enter the amount of income from American Samoa you are excluding (Form 4563, line 15)   5. Fillable 1040x form       6. Fillable 1040x form Add the amounts on lines 2, 3, 4, and 5   6. Fillable 1040x form   7. Fillable 1040x form Add the amounts on lines 1 and 6. Fillable 1040x form  This is your modified adjusted  gross income. Fillable 1040x form Enter this amount  on Form 8863, line 14   7. Fillable 1040x form   Phaseout. Fillable 1040x form   If your MAGI is within the range of incomes where the credit must be reduced, you will figure your reduced credit using lines 10-18 of Form 8863. Fillable 1040x form The same method is shown in the following example. Fillable 1040x form Example. Fillable 1040x form You are filing a joint return with a MAGI of $112,000. Fillable 1040x form In 2013, you paid $6,600 of qualified education expenses. Fillable 1040x form You figure the tentative lifetime learning credit (20% of the first $10,000 of qualified education expenses you paid for all eligible students). Fillable 1040x form The result is a $1,320 (20% x $6,600) tentative credit. Fillable 1040x form Because your MAGI is within the range of incomes where the credit must be reduced, you must multiply your tentative credit ($1,320) by a fraction. Fillable 1040x form The numerator of the fraction is $127,000 (the upper limit for those filing a joint return) minus your MAGI. Fillable 1040x form The denominator is $20,000, the range of incomes for the phaseout ($107,000 to $127,000). Fillable 1040x form The result is the amount of your phased out (reduced) lifetime learning credit ($990). Fillable 1040x form   $1,320 × $127,000 − $112,000  $20,000 = $990   Claiming the Credit You claim the lifetime learning credit by completing Form 8863 and submitting it with your Form 1040 or 1040A. Fillable 1040x form Enter the credit on Form 1040, line 49, or Form 1040A, line 31. Fillable 1040x form Note. Fillable 1040x form 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. Fillable 1040x form Prev  Up  Next   Home   More Online Publications