IRS Update 2/8:
Good News for your Valentine’s day and your tax refund! The IRS announced today that they are now able to process tax returns that contain form 8863 with Education Credits beginning February 14th. Form 8863 is used to claim two higher education credits — the American Opportunity Tax Credit and the Lifetime Learning Credit.
Read the full IRS update
The IRS announced today that they will not be able to process tax returns with Form 8863 until mid-February. This is a delay that will impact all tax preparation methods.
What is Form 8863?
Form 8863 is the form that is used to claim the American Opportunity Credit and the Lifetime Learning Credit.
American Opportunity Credit: The American Opportunity Tax Credit is offered to students who pay qualified tuition (and aren’t claimed as dependents elsewhere), as well as to parents who pay expenses for their dependent students or themselves. This tax credit allows you to claim up to $2,500 per student. The full credit is available for individuals with a MAGI(Modified Adjusted Gross Income) of $80,000 or less, $160,000 for married filing jointly. It is 40% refundable, meaning that you can get up to $1,000 back even if you don’t owe taxes.
Lifetime Learning Credit: The Lifetime Learning Credit a perk available to you if you paid qualified college expenses. Rather than limiting your ability to get tax credits for education expenses for the first four years of college, it’s possible to use the Lifetime Learning Credit to offset your expenses even in graduate or professional school. As long as the educational institution is qualified, undergraduate or beyond, you can qualify for up to $2,000 in tax credits for your expenses. It’s figured on 20% of your tuition and fees, up to the first $10,000. There is a phase out as you reach certain income levels. Parents can claim this for dependent students.
Can I still File?
Yes!!! TurboTax is up to date with all the latest tax law changes, including changes to the American Opportunity Credit and Lifetime Learning Credit, so you can be confident that you are getting every deduction and credit you deserve on your tax return. We recommend that you file now with TurboTax, so you will be at the front of the line for your refund when the IRS begins to process these returns. Returns will be submitted on a first in, first out basis. For the fastest refund possible, make sure you e-file and select direct deposit.
Last year, the IRS issued 9 out of 10 refunds in 21 days or less and expects the same results this year. Once your return is accepted by the IRS, you can track the status of your return you can login in to your MyTurboTax account at anytime.