John (26) and Maria (26) are married and filing a joint return. Both Maria and John were full-time students all year at State College, located at 11100 College Boulevard, Your City, Your State. During the year, John paid $5,000 in tuition and fees, substantiated with Form 1098-T. Maria paid $3,800 in tuition and fees, also substantiated with Form 1098-T. Both John and Maria have part-time jobs outside of school. They did not receive any scholarships during the year. Their adjusted gross income is $47,000. Their total tax on line 12a of their federal Form 1040 is $2,327. They had no additional taxes. Both John and Maria meet all the requirements to qualify for the American Opportunity Tax Credit.
Complete Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits) for John and Maria. You should also complete the Credit Limit Worksheet,
8863 OMB No 1545-0074 Form Education Credits (American Opportunity and Lifetime Learning Credits) Attach to Form 1040 or 1040-SR. Go to www.irs.gov/Form&63 for instructions and the latest information 2019 Department of the Treasury Internal Revenue Service Names shown on retum Attachment Sequence Ne 50 Your social security number CAUTION 4 8 Complete a separate Part III on page 2 for each student for whom you're claiming either credit before you complete Parts / and II. Parti Refundable American Opportunity Credit 1 After completing Part Ill for each student, enter the total of all amounts from all Parts III, line 30 2 Enter: $180,000 if married filing jointly: $90,000 if single, head of household, or qualifying widower) 2 3 Enter the amount from Form 1040 or 1040-SR, line 8b. If you're filing Form 2555 or 4563, or you're excluding income from Puerto Rico, see Pub. 970 for the amount to enter 3 4 Subtract line 3 from line 2. If zero or less, stop: you can't take any education credit. 5 Enter: $20,000 if married filing jointly: $10,000 if single, head of household, or qualifying widow(er) 5 6 If line 4 is: Equal to or more than line 5, enter 1.000 on line 6 . Less than line 5. divide line 4 by line 5. Enter the result as a decimal (rounded to at least three places) 7 Multiply line 1 by line 6. Caution: If you were under age 24 at the end of the year and meet the conditions described in the instructions, you can't take the refundable American opportunity credit; skip line 8, enter the amount from line 7 on line 9, and check this box 7 8 Refundable American opportunity credit. Multiply line 7 by 40% (0.40). Enter the amount here and on Form 1040 or 1040-SR, line 18c. Then go to line 9 below Part II Nonrefundable Education Credits 9 Subtract line 8 from line 7. Enter here and on line 2 of the Credit Limit Worksheet (see instructions) After completing Part Ill for each student, enter the total of all amounts from all Parts III, line 31. If zero, skip lines 11 through 17, enter-O- on line 18, and go to line 19 11 Enter the smaller of line 10 or $10,000 12 Multiply line 11 by 20% (0.20) 13 Enter: $136,000 if married filing jointly; $68,000 it single, head of household, or qualifying widower) 13 14 Enter the amount from Form 1040 or 1040-SR, line 8b. If you're filing Form 2555 or 4563, or you're excluding income from Puerto Rico, see Pub. 970 for the amount to enter 15 Subtract line 14 from line 13. If zero or less, skip lines 16 and 17, enter-O-on line 18, and go to line 19 15 16 Enter: $20,000 if married filing jointly: $10,000 if single, head of household, or qualifying widow(er) 16 17 If line 15 is: Equal to or more than line 16, enter 1.000 on line 17 and go to line 18 . Less than line 16, divide line 15 by line 16. Enter the result as a decimal (rounded to at least three places). 17 18 Multiply line 12 by line 17. Enter here and on line 1 of the Credit Limit Worksheet (see instructions) 18 19 Nonrefundable education credits. Enter the amount from line 7 of the Credit Limit Worksheet (see Instructions) here and on Schedule 3 (Form 1040 or 1040-SR), line 3. 19 For Paperwork Reduction Act Notice, see your tax return instructions. Cat No. 25379M Form 8863 2015 9 10 10 12 14 2019 FORM 8863 CREDIT LIMIT WORKSHEET - LINES 18 and 19 Keep for Your Records NONREFUNDABLE CREDIT WORKSHEET 1. Enter the amount from Form 8863, line 18 1. 2. Enter the amount from Form 8863, line 9 2. 3. Add Ines 1 and 2 3. 4. Enter the amount from: Form 1040 or 1040-SR, line 12b 4. 5. Enter the amount from: Schedule 3 (Form 1040 or 1040-SR), lines 1 and 2, and the amount from Schedule R line 22 5. 6. Subtract line 5 from line 4 6. 7. Enter the smaller of line 3 or line 6 here and on Form 8863, line 19 7. 8863 OMB No 1545-0074 Form Education Credits (American Opportunity and Lifetime Learning Credits) Attach to Form 1040 or 1040-SR. Go to www.irs.gov/Form&63 for instructions and the latest information 2019 Department of the Treasury Internal Revenue Service Names shown on retum Attachment Sequence Ne 50 Your social security number CAUTION 4 8 Complete a separate Part III on page 2 for each student for whom you're claiming either credit before you complete Parts / and II. Parti Refundable American Opportunity Credit 1 After completing Part Ill for each student, enter the total of all amounts from all Parts III, line 30 2 Enter: $180,000 if married filing jointly: $90,000 if single, head of household, or qualifying widower) 2 3 Enter the amount from Form 1040 or 1040-SR, line 8b. If you're filing Form 2555 or 4563, or you're excluding income from Puerto Rico, see Pub. 970 for the amount to enter 3 4 Subtract line 3 from line 2. If zero or less, stop: you can't take any education credit. 5 Enter: $20,000 if married filing jointly: $10,000 if single, head of household, or qualifying widow(er) 5 6 If line 4 is: Equal to or more than line 5, enter 1.000 on line 6 . Less than line 5. divide line 4 by line 5. Enter the result as a decimal (rounded to at least three places) 7 Multiply line 1 by line 6. Caution: If you were under age 24 at the end of the year and meet the conditions described in the instructions, you can't take the refundable American opportunity credit; skip line 8, enter the amount from line 7 on line 9, and check this box 7 8 Refundable American opportunity credit. Multiply line 7 by 40% (0.40). Enter the amount here and on Form 1040 or 1040-SR, line 18c. Then go to line 9 below Part II Nonrefundable Education Credits 9 Subtract line 8 from line 7. Enter here and on line 2 of the Credit Limit Worksheet (see instructions) After completing Part Ill for each student, enter the total of all amounts from all Parts III, line 31. If zero, skip lines 11 through 17, enter-O- on line 18, and go to line 19 11 Enter the smaller of line 10 or $10,000 12 Multiply line 11 by 20% (0.20) 13 Enter: $136,000 if married filing jointly; $68,000 it single, head of household, or qualifying widower) 13 14 Enter the amount from Form 1040 or 1040-SR, line 8b. If you're filing Form 2555 or 4563, or you're excluding income from Puerto Rico, see Pub. 970 for the amount to enter 15 Subtract line 14 from line 13. If zero or less, skip lines 16 and 17, enter-O-on line 18, and go to line 19 15 16 Enter: $20,000 if married filing jointly: $10,000 if single, head of household, or qualifying widow(er) 16 17 If line 15 is: Equal to or more than line 16, enter 1.000 on line 17 and go to line 18 . Less than line 16, divide line 15 by line 16. Enter the result as a decimal (rounded to at least three places). 17 18 Multiply line 12 by line 17. Enter here and on line 1 of the Credit Limit Worksheet (see instructions) 18 19 Nonrefundable education credits. Enter the amount from line 7 of the Credit Limit Worksheet (see Instructions) here and on Schedule 3 (Form 1040 or 1040-SR), line 3. 19 For Paperwork Reduction Act Notice, see your tax return instructions. Cat No. 25379M Form 8863 2015 9 10 10 12 14 2019 FORM 8863 CREDIT LIMIT WORKSHEET - LINES 18 and 19 Keep for Your Records NONREFUNDABLE CREDIT WORKSHEET 1. Enter the amount from Form 8863, line 18 1. 2. Enter the amount from Form 8863, line 9 2. 3. Add Ines 1 and 2 3. 4. Enter the amount from: Form 1040 or 1040-SR, line 12b 4. 5. Enter the amount from: Schedule 3 (Form 1040 or 1040-SR), lines 1 and 2, and the amount from Schedule R line 22 5. 6. Subtract line 5 from line 4 6. 7. Enter the smaller of line 3 or line 6 here and on Form 8863, line 19 7
