What Form 8863 (2019) Is For
Form 8863 (2019) lets you claim education credits that reduce your federal income tax. These credits include the American Opportunity Tax Credit and the Lifetime Learning Credit for qualified education expenses. The form relies on details from Form 1098-T and your own records for academic periods beginning in 2019.
These education credits support higher education by helping to pay qualified expenses. Eligible students must attend a postsecondary institution that participates in a student aid program through the Internal Revenue Service. Schools issuing Form 1098-T meet this requirement.
Publication 970 explains how the American Opportunity Credit and Lifetime Learning Tax Credit apply to qualified higher education expense planning. The rules outlined covered tuition, fees, as well asd required course materials. These guidelines help taxpayers accurately document their expenses.
When You’d Use Form 8863 (2019)
You use Form 8863 when filing your 2019 Form 1040 to claim education tax credits. The form reports qualified education expenses for an eligible student enrolled in a postsecondary institution in the United States. These expenses include tuition and fees, books, supplies, and equipment, as well as required student activity fees tied to enrollment.
You also use Form 8863 when filing late or amending an earlier return with Form 1040-X. This applies when you did not claim the American Opportunity Credit or Lifetime Learning Credit on the original filing. The rules also cover scholarships and grants, 529 plans, Coverdell Education Savings Account withdrawals, and student loan payments for qualifying academic periods.
If you owe back taxes and need manageable repayment options, review our IRS Payment Plans guide for step-by-step instructions.
Key Rules or Details for 2019
Several rules determine who is eligible to claim education credits for qualified higher education expense payments. You cannot claim a credit if someone lists you as a dependent on their Form 1040. Your modified adjusted gross income must fall within the limits in Publication 970 for the American Opportunity Credit or Lifetime Learning Credit.
Qualified expenses include tuition and fees, course materials, supplies and equipment, and required school charges. These amounts must be reduced by scholarships and grants or other tax-free educational assistance, including employer programs and Pell Grant funding. Box 1, Box 2, and Box 5 entries on Form 1098-T help confirm your starting figures.
You cannot use the same qualified expenses for multiple tax benefits. Credits cannot apply to the costs funded by tax-free distributions from 529 accounts, prepaid tuition plans, or Coverdell ESA withdrawals reported on Form 1099-Q. Only one credit applies per student each year, and eligible students must meet enrollment and clock or credit hours requirements for the American Opportunity Tax Credit.
Step-by-Step (High Level)
Begin by gathering documents such as Form 1098-T, receipts, and bookstore records to support qualified expenses paid during the 2019 academic period. These records should cover tuition and fees, supplies and equipment, and required charges listed by your school. This information helps confirm the education credits you can claim for an eligible student.
- Review all qualified expenses: Each listed item meets the rules for education credits when supported by payment records.
- Subtract Scholarships and Grants: Each amount of tax-free educational assistance reduces the qualified education expenses available for education credits.
- Check student loans: Loan disbursements applied to qualified expenses count as payments for eligible academic periods under education credit rules.
- Complete the student section on Form 8863: Information from Form 1098-T and school records establishes eligibility and supports qualified expenses.
- Calculate the credit: The refundable and nonrefundable amounts transfer to Form 1040 according to the education credit instructions.
For help understanding federal tax forms, schedules, and filing requirements, refer to our IRS Form Help Center.
Common Mistakes and How to Avoid Them
Filing delays often originate from preventable submission issues that appear in IRS processing. Identifying these procedural errors strengthens compliance accuracy and supports smoother review outcomes. Clear documentation and verified entries ensure that filings meet IRS requirements without avoidable setbacks.
- Missing Signatures: Required signatures are frequently left blank, and the filer signs every designated field before submission to complete the filing.
- Mismatched EINs: Employer identification numbers often differ from those in IRS records. The filer verifies the number using official documents to ensure a match with IRS data.
- Missing Attachments: Required schedules or statements are regularly omitted, and the filer includes all mandated attachments listed in the instructions to complete the submission.
- Incorrect Payment Timing: Payments are sometimes submitted before liabilities are posted, and the filer remits payment after the balance is updated in the IRS system.
- Incomplete Forms: Mandatory lines are occasionally left blank, and the filer enters complete information on every required line before filing to avoid delays.
For guidance on reducing or removing IRS penalties due to reasonable cause, administrative errors, or first-time relief, see our IRS Penalty Abatement guide.
What Happens After You File
The Internal Revenue Service reviews Form 8863 together with your Form 1040. The agency verifies enrollment, qualified expenses, and eligibility using information from Form 1098-T and related records. Automated systems compare reported entries to school data and may request clarification when discrepancies are detected.
If clarification is needed, the IRS issues a notice requesting receipts, schedules, or enrollment documentation. Timely responses help maintain credit accuracy and support smooth processing. Refundable and nonrefundable credit amounts are then applied to your return, as allowed under the education credit rules.
Frequently Asked Questions
Can education credits be claimed without Form 1098-T?
Some students do not receive Form 1098-T due to exceptions described in Publication 970. The Internal Revenue Service still requires proof of enrollment, Qualified education expenses, and eligibility for education credits during the relevant academic periods. Payment receipts, school records, and support documentation can verify qualified expenses for Form 8863 Education Credits.
Do student loans count as payments for education credits?
Student loans count as payments when used for tuition and fees, or other qualified expenses, such as books, supplies, and equipment. These amounts can support the American Opportunity Tax Credit or the Lifetime Learning Credit on Form 8863. Student loan interest appears separately on Form 1040 under its own deduction rules.
How do 529 plans and other education savings accounts affect education credits?
Distributions from 529 plans, 529 College Savings Plans, prepaid tuition plans, or a Coverdell Education Savings Account may reduce qualified expenses available for education tax credits. Form 1099-Q amounts must be compared with qualified distributions to prevent double-counting. Scholarships and grants, Pell Grant amounts in Box 5, and other tax-free educational assistance must also be applied to qualified higher education expense calculations.
Are room and board or medical expenses ever eligible for education credits?
Room and board are not considered qualified expenses for Form 8863, even when required by a postsecondary institution. Medical expenses, transportation, and Internet access also remain outside the definition of qualified education expenses. Only qualified tuition and fees, student activity fees, and required supplies and equipment qualify for education credits.
Do continuing education or nontraditional programs qualify for the Lifetime Learning Credit?
Many postsecondary institutions and trade schools offer certification programs, non-credit courses, and classes measured in clock or credit hours that meet the requirements for the Lifetime Learning Credit. These programs must support higher education or job skill development and participate in a student aid program recognized in the United States. Eligibility is confirmed through information reported in Box 1 or Box 2 of Form 1098-T and related school documentation.
