I have entered information from a 1098-T for an education credit, no credit is calculating. How do I correct this?
If you've entered information from your Form 1098-T into your tax return using OLT (Online Taxes) software and no education credit is calculating, there are several possible reasons. Follow these steps to troubleshoot and correct the issue:
Verify Eligibility for Education Credits
Ensure you meet the eligibility requirements for the American Opportunity Credit (AOTC) or Lifetime Learning Credit (LLC).
For the AOTC:
- The student must be pursuing a degree, certificate, or other recognized education credential.
- The student must be enrolled at least half-time for at least one academic period beginning during the tax year.
- The student must not have completed the first four years of postsecondary education before the beginning of the tax year.
- The student must not have claimed the AOTC (or former Hope Credit) for more than four tax years.
- The student must not have a felony drug conviction at the end of the tax year.
For the LLC:
- The student does not need to be pursuing a degree.
- The student does not need to be enrolled at least half-time.
- Courses may be taken to acquire or improve job skills.
Check Your 1098-T Information
Confirm that the amounts entered from Box 1 (Payments received for qualified tuition and related expenses) and Box 5 (Scholarships or grants) are accurate.
- Tax-free scholarships, grants, Pell Grants, employer-provided educational assistance, veterans' educational assistance, and other tax-free educational assistance generally reduce qualified education expenses available for a credit.
- If tax-free educational assistance equals or exceeds qualified education expenses, little or no education credit may be available.
- A Form 1098-T alone does not determine eligibility for a credit. Additional information may be required.
Review Your Filing Status and Income
- Education credits are subject to phase-outs based on your modified adjusted gross income (MAGI). If your income exceeds the threshold, your credit may be reduced or eliminated.
- For 2025, the phase-out thresholds for the AOC are $90,000 for single filers and $180,000 for married filing jointly. For LLC, the thresholds are $60,000 and $120,000 respectively.
Verify the Student Qualifies for the Credit
Check whether:
- You are claiming the student as a dependent if required.
- Another taxpayer is not claiming the same student for an education credit.
- The student has a valid taxpayer identification number (TIN) issued on or before the due date of the return (including extensions, if applicable).
- The educational institution is an eligible educational institution.
Ensure Proper Form Selection in OLT Software
- In OLT’s tax software, navigate to the Federal section → Credits → Show more → Education Credits.
- Follow on-screen prompts to enter your 1098-T data. The software will automatically calculate eligible credits based on your inputs and eligibility.
- If no credit appears, check if you’ve selected the correct credit type (AOC or LLC) and ensure all required fields are completed.
Recheck for Errors or Missing Data
Verify that:
- All Form 1098-T information has been entered correctly.
- Qualified education expenses not shown on Form 1098-T have been entered if applicable.
- Any required books, supplies, and course materials have been entered where allowed.
- Scholarship and grant amounts have been entered correctly.
- The student's enrollment status has been entered correctly.
- All required taxpayer and student identification information has been provided.
Source:
Form 1098-T Instructions
Form 8863 Instructions
Pub 970
Disclaimer: Always verify information with official Federal or State Department of Revenue Forms and Instructions before filing your return.