INSTRUCTIONS: EDUCATION CREDITS (AMERICAN OPPORTUNITY AND LIFETIME LEARNING CREDITS) (Form 8863)

For college students, as well as those who are paying for the education of dependents, some tax credits can be taken. Form 8863 should be filled out by students who are no longer dependent or by parents or guardians concerning a dependent. The form is available from the IRS website or can be obtained at their offices.

Education Credits (American Opportunity and Lifetime Learning Credits) 8863 Step 1: Determine whether you are filing for an American Opportunity credit, which is refundable, or a Lifetime Learning Credit, which is not. A refundable credit can be returned to you even if you did not pay taxes. Those applying for an American Opportunity credit should complete parts I and III. Those applying for a Lifetime Learning Credit should complete part II. Both types of credits require you to fill out part IV.

Education Credits (American Opportunity and Lifetime Learning Credits) 8863 Step 2: Enter your name and Social Security Number at the top of the form.

Education Credits (American Opportunity and Lifetime Learning Credits) 8863 Step 3: If completing an application for an American Opportunity credit, list the name, Social Security number and qualified expenses where indicated under Part I. Qualified expenses include all educational materials and supplies needed for classes.

Education Credits (American Opportunity and Lifetime Learning Credits) 8863 Step 4: Perform the calculations as indicated. Take the tentative American Opportunity Credit and enter it in line 7 of Part III. Perform the calculations indicated to determine the total size of your credit.

Education Credits (American Opportunity and Lifetime Learning Credits) 8863 Step 5: If completing an application for a Lifetime Learning Credit, enter student names, identification information and qualified expenses under part II. This credit only applies to materials which must be purchased from an academic institution as a condition of enrollment. Perform the calculations as instructed.

Education Credits (American Opportunity and Lifetime Learning Credits) 8863 Step 6: Both types of credit applications must be completed under Part IV as instructed to determine the final total credit that can be claimed. You may apply for both types of credits, but not for the same student in the same year.

Education Credits (American Opportunity and Lifetime Learning Credits) 8863 Step 7: Enter the credit where appropriate on the tax form you are submitting.