How to Fill Out Form 8863 to Claim Educational Credits

IRS Form 8863 lets students and families claim valuable education-related tax credits, making higher education more affordable.  

If you’re eligible, you may be able to reduce your federal tax bill or even boost your refund with two key education credits: the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC).  

Find out which credit might apply to your situation, who qualifies, and how to file Form 8863.

What is Form 8863?

Form 8863 lets eligible students and families claim education tax credits to reduce their tax bill and make higher education more affordable. Specifically, you use it to claim:

• The American Opportunity Tax Credit (AOTC). It provides up to $2,500 per student, and can be claimed up to four times per student based on a qualified expense while pursuing a four-year postsecondary degree. Up to $1,000 of this credit is refundable if your tax bill is already reduced to zero. 
• The Lifetime Learning Credit (LLC). It offers up to $2,000 per tax return for undergraduate, graduate, and professional education, with no limit on the number of years it can be claimed. Unlike the AOTC, the LLC is not refundable, meaning it can lower your tax bill but won’t result in a refund if you owe nothing.  

The next sections break down educational tax credits in detail, including what expenses qualify, how to file Form 8863, and steps to maximize your tax savings.

American Opportunity Tax Credit (AOTC)

The AOTC covers qualified tuition and related expenses for students pursuing a degree or recognized educational credential. Either the student (if not claimed as a dependent) or the parent (if they claim the student as a dependent) can claim the credit. Unlike the LLC, the AOTC can be claimed for each eligible student on a tax return.

Credit breakdown

• Maximum credit: Up to $2,500 per eligible student 
• Refundable portion: 40% (up to $1,000) is refundable if your tax bill is reduced to zero. 
• Qualified expenses: Eligible expenses include tuition, required fees, and course materials required for enrollment. 

Amount spent on eligible education expenses	Percentage you can claim	Total credit
The first $2,000	100%	$2,000
The next $2,000	25%	$500

AOTC eligibility requirements

To qualify for the AOTC, either the student or the taxpayer claiming them as a dependent must meet these criteria:

The student must: 

• Be pursuing a degree or recognized educational credential. 
• Be enrolled at least half-time in at least one course at an eligible educational institution during the tax year. 
• Not have earned a four-year degree before the beginning of the tax year. 
• Not have claimed the AOTC (or the former Hope Credit) for more than four tax years total. 
• Not have a felony drug conviction by the end of the tax year. 

The taxpayer claiming the credit must have a modified adjusted gross income (MAGI) of $80,000 or less ($160,000 for married couples filing jointly) for full eligibility in the 2024 tax year. The credit is gradually reduced between $80,000 and $90,000 ($160,000–$180,000 for joint filers). 

A student cannot claim the AOTC on their own tax return if they: 

• Are claimed as a dependent on someone else’s tax return (however, the taxpayer claiming them may be eligible to claim the credit) 
• Have completed their first four years of higher education before the beginning of the tax year 
• Have claimed the AOTC (or the former Hope Credit) for four tax years 
• Have a felony drug conviction during the tax year 
• Have a 2024 MAGI of $90,000 or more ($180,000 for married couples filing jointly) 
• Did not pay qualified education expenses to an eligible institution

Lifetime Learning Credit (LLC)

The LLC helps offset education costs by allowing students or parents to claim 20% of the first $10,000 they spend on tuition and fees—up to a maximum of $2,000 per tax return. 

Unlike the AOTC, the LLC is available for undergraduate, graduate, and professional education and has no limit on the number of years it may be claimed. There is also no minimum enrollment requirement, meaning students can take just one course and still qualify.

Credit breakdown

• Maximum credit: Up to $2,000 per tax return 
• Calculation: 20% of qualified education expenses (up to $10,000), which allows a maximum credit of $2,000. 
• Qualified expenses: Tuition, required fees, and course materials (if purchased directly from the institution as a condition of enrollment). 

Expense limit	Percentage claimed	Maximum credit
Up to $10,000	20%	$2,000

Note: The LLC is a nonrefundable credit, meaning it can reduce your tax bill to $0, but it won’t result in a refund beyond that.

LLC eligibility requirements

To qualify for the LLC, you, your dependent, or a third party must pay qualified education expenses related to higher education. 

Beyond that, the student must:   

• Be enrolled part or full-time at an eligible educational institution 
• Take courses aimed at gaining or improving job skills or pursuing a degree or recognized educational credential 
• Be enrolled for at least one course within the tax year 
• Have a MAGI of $80,000 or less ($160,000 for joint filers) to receive the full credit for the 2024 tax year. The credit phases out between $80,000 and $90,000 ($160,000–$180,000 for joint filers). 

Who does not qualify? The LLC cannot be claimed by: 

• Anyone claimed as a dependent on another tax return 
• Taxpayers who file as married filing separately 
• Those who have already claimed the AOTC for the same student in the same tax year 
• Students enrolled only in courses that don’t lead to a degree or recognized credential and aren’t meant to acquire or improve job skills
• Those with a 2024 MAGI of $90,000 or more ($180,000 for joint filers)

Form 8863 qualified expenses

To claim the American Opportunity Tax Credit or the Lifetime Learning Credit, expenses must meet the IRS definition of qualified education expenses. Below is a breakdown of what is and isn’t covered so you can identify qualified expenses before proceeding.

Common qualified expenses: 

• Tuition and mandatory enrollment fees paid to an eligible institution 
• Required course materials like books, supplies, and equipment needed for courses. The AOTC covers purchases even if they’re made outside the school; the LLC covers only purchases made directly from the school as a condition of enrollment. 
• Student activity fees, but only if they are required for enrollment or attendance 

Non-qualified expenses:

• Room and board, even if paid directly to the school 
• Transportation and travel costs, including parking 
• Medical expenses and student health insurance premiums 
• Extracurricular fees, unless mandatory for enrollment 
• Personal expenses, which include costs for personal items or entertainment

How to file form 8863 and claim education credits

To claim the AOTC or LLC, you must complete Form 8863 and submit it with your tax return. This form helps you calculate and claim your eligible credit based on qualified education expenses paid to an eligible educational institution. 

Before you file: 

• Obtain Form 1098-T (tuition statement) from your school; it reports your tuition payments and scholarships. Note that it won’t include all qualified education expenses, such as books and required fees paid separately. 
• Ensure your expenses meet IRS guidelines for qualified education expenses. 
• Use Form 8863 to calculate your credit and include it with your federal tax return. 

TurboTax can help you handle the complexities of these forms so you can get the most out of your education credits—without the guesswork. Here’s how TurboTax can take the stress out of your tax season: 

• File with expert support: TurboTax Assisted connects you with tax professionals who can answer questions as you file. 
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