8863 Form

Form 8863 is a tax form used by taxpayers in the United States to calculate the education credits they're entitled to claim. Education credits are designed to offset the costs of higher education by reducing the amount of income tax owed.

Section A: Personal Information

In Section A, taxpayers provide personal information. This includes the taxpayer’s name, address, and social security number. It’s essential to ensure that all information is accurate to prevent any processing delays with the IRS.

Section B: Qualifying Child or Dependent

Section B addresses information about a qualifying child or dependent. To be eligible for education credits, the student must be enrolled at an eligible educational institution. Key questions to ask here are:

  • Is the student enrolled at least half-time?
  • Was the student convicted of a felony for possession or distribution of a controlled substance?

Answers to these questions determine eligibility for the American Opportunity Credit (AOC) or the Lifetime Learning Credit (LLC).

Section C: Dependent Care Expenses

Section C is where you report expenses paid for dependent care that qualifies for the credit. This includes expenses related to the care of a qualifying individual so that the taxpayer can work or look for work. It’s important to note that the care provider’s information must also be included.

Section D: Child and Dependent Care Credit

In Section D, the taxpayer calculates the Child and Dependent Care Credit. This credit is for expenses paid for the care of qualifying individuals to allow the taxpayer to work or actively look for work. The amount of the credit is a percentage of the allowable expenses.

Section E: Credits Related to Other Dependent Care Expenses

Section E may involve additional credits related to dependent care expenses that were not covered in the previous sections. For instance, if there are elder care expenses for a dependent parent, they might be reported here.

Section F: Record-keeping

The final section, Section F, emphasizes the importance of record-keeping. Taxpayers should keep all receipts and records of educational expenses and care provider information. This information is crucial if the IRS requires substantiation of the claims made on the form.

Example Table for Credit Calculation:

Qualifying ExpensesMaximum Amount for Credit Calculation
Tuition and feesUp to $2,000 per student for AOC
Up to $10,000 for LLC
Example Table for Credit Calculation

For the AOC, the maximum credit per student is $2,500, and 40% of that is refundable. For the LLC, the credit is nonrefundable and capped at $2,000 per return, regardless of the number of students.

Remember that tax situations can vary greatly, and it’s advisable to consult with a tax professional or use reputable tax software to ensure that Form 8863 is filled out correctly.

When preparing to file your taxes for 2024, it’s crucial to consider all educational expenses from [year-1] and understand how they might affect your potential credits. Form 8863 should be filed along with your Form 1040 or 1040-SR.

Remember, accurate record-keeping and attention to detail when completing this form can lead to substantial tax savings and help avoid complications with the IRS. Always keep a copy of the form and any supporting documentation for your records.

Form 8863, Education Credits, is the tax form used for claiming tax credits related to educational expenses. You can use the same tax form to claim educational credits for more than one student, but figuring out the total amount can be tricky. Before you start filling out Form 8863, make sure to take a look at our guide to file on it.

One important thing to note about Form 8863 is that the nonrefundable education credits refer to the lifetime learning tax credit, shortly known as the LLTC or LLC. The other is the refundable American opportunity tax credit, AOTC

Fill out Form 8863 for the 2024 tax season

Form 8863 above is for the 2023 taxes you’re filing in 2024 after the start of the tax season. It’s an online fillable PDF document that you can save as a PDF file after filling it out. You can then print out a paper copy and attach it to your federal income tax return. Filling out Form 8863 this way doesn’t count as e-filing as you can’t file it with the IRS – essentially, it’s a PDF file that allows you to enter information on your computer to print out a perp copy later.

Things you need to file Form 8863

Aside from the student’s school information, you’ll need Form 1098-T, Tuition Statement, to file Form 8863 and figure out the money amounts. Needless to say, you’ll need this information return for each student for whom you’re claiming the credit. 

After filling out Form 8863, attach it to your federal income tax return. Because Form 8863 isn’t scannable, you can staple it on Form 1040 or keep it in the same envelope/packaging. As long as every attachment is present with your federal income tax return, you don’t physically need to do anything to attach the tax forms.

File Form 8863 electronically

To be able to file Form 8863 electronically, you’ll need to do it through a tax preparation service like TurboTax or any other. Additionally, you may be eligible to file Form 8863 along with many others using the Free File Fillable Forms. 

The above PDF file is only for those that are filing a paper tax return. If you’re not e-filing your tax return, you don’t really need to file Form 8863 – or any other tax form for that matter – electronically. 

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