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Taxact online 3. Taxact online   Lifetime Learning Credit Table of Contents Introduction Can You Claim the CreditWho Can Claim the Credit Who Cannot Claim the Credit What Expenses QualifyQualified Education Expenses No Double Benefit Allowed Expenses That Do Not Qualify Who Is an Eligible Student Who Can Claim a Dependent's Expenses Figuring the CreditEffect of the Amount of Your Income on the Amount of Your Credit Claiming the Credit Introduction For 2013, there are two tax credits available to help you offset the costs of higher education by reducing the amount of your income tax. Taxact online They are the American opportunity credit and the lifetime learning credit. Taxact online This chapter discusses the lifetime learning credit. Taxact online The American opportunity credit is discussed in chapter 2, The American Opportunity Credit . Taxact online This chapter explains: Who can claim the lifetime learning credit, What expenses qualify for the credit, Who is an eligible student, Who can claim a dependent's expenses, How to figure the credit, How to claim the credit, and When the credit must be repaid. Taxact online What is the tax benefit of the lifetime learning credit. Taxact online   For the tax year, you may be able to claim a lifetime learning credit of up to $2,000 for qualified education expenses paid for all eligible students. Taxact online There is no limit on the number of years the lifetime learning credit can be claimed for each student. Taxact online   A tax credit reduces the amount of income tax you may have to pay. Taxact online Unlike a deduction, which reduces the amount of income subject to tax, a credit directly reduces the tax itself. Taxact online The lifetime learning credit is a nonrefundable credit. Taxact online This means that it can reduce your tax to zero, but if the credit is more than your tax the excess will not be refunded to you. Taxact online   Your allowable lifetime learning credit may be limited by the amount of your income and the amount of your tax. Taxact online Can you claim more than one education credit this year. Taxact online   For each student, you can elect for any year only one of the credits. Taxact online For example, if you elect to take the lifetime learning credit for a child on your 2013 tax return, you cannot, for that same child, also claim the American opportunity credit for 2013. Taxact online   If you are eligible to claim the lifetime learning credit and you are also eligible to claim the American opportunity credit for the same student in the same year, you can choose to claim either credit, but not both. Taxact online   If you pay qualified education expenses for more than one student in the same year, you can choose to take certain credits on a per-student, per-year basis. Taxact online This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year. Taxact online Differences between the American opportunity and lifetime learning credits. Taxact online   There are several differences between these two credits. Taxact online For example, you can claim the American opportunity credit for the same student for no more than 4 tax years, but any year in which the Hope Scholarship Credit was claimed counts toward the 4 years. Taxact online However, there is no limit on the number of years for which you can claim a lifetime learning credit based on the same student's expenses. Taxact online The differences between these credits are shown in Appendix B, Highlights of Education Tax Benefits for Tax Year 2013 near the end of this publication. Taxact online Overview of the lifetime learning credit. Taxact online   See Table 3-1, Overview of the Lifetime Learning Credit for the basics of the lifetime learning credit. Taxact online The details are discussed in this chapter. Taxact online Can You Claim the Credit The following rules will help you determine if you are eligible to claim the lifetime learning credit on your tax return. Taxact online Who Can Claim the Credit Generally, you can claim the lifetime learning credit if all three of the following requirements are met. Taxact online You pay qualified education expenses of higher education. Taxact online You pay the education expenses for an eligible student. Taxact online The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. Taxact online Table 3-1. Taxact online Overview of the Lifetime Learning Credit Maximum credit Up to $2,000 credit per return Limit on modified adjusted gross income (MAGI) $127,000 if married filling jointly;  $63,000 if single, head of household, or qualifying widow(er) Refundable or nonrefundable Nonrefundable—credit limited to the amount of tax you must pay on your taxable income Number of years of postsecondary education Available for all years of postsecondary education and for courses to acquire or improve job skills Number of tax years credit available Available for an unlimited number of years Type of program required Student does not need to be pursuing a program leading to a degree or other recognized education credential Number of courses Available for one or more courses Felony drug conviction Felony drug convictions do not make the student ineligible Qualified expenses Tuition and fees required for enrollment or attendance (including amounts required to be paid to the institution for course-related books, supplies, and equipment) Payments for academic periods Payments made in 2013 for academic periods beginning in 2013 or beginning in the first 3 months of 2014 Note. Taxact online Qualified education expenses paid by a dependent for whom you claim an exemption, or by a third party for that dependent, are considered paid by you. Taxact online “Qualified education expenses” are defined later under Qualified Education Expenses . Taxact online “Eligible students” are defined later under Who Is an Eligible Student . Taxact online A dependent for whom you claim an exemption is defined later under Who Can Claim a Dependent's Expenses . Taxact online You may find Figure 3-1, Can You Claim the Lifetime Learning Credit for 2013 , later, helpful in determining if you can claim a lifetime learning credit on your tax return. Taxact online Who Cannot Claim the Credit You cannot claim the lifetime learning credit for 2013 if any of the following apply. Taxact online Your filing status is married filing separately. Taxact online You are listed as a dependent on another person's tax return (such as your parents'). Taxact online See Who Can Claim a Dependent's Expenses , later. Taxact online Your modified adjusted gross income (MAGI) is $63,000 or more ($127,000 or more in the case of a joint return). Taxact online MAGI is explained later under Effect of the Amount of Your Income on the Amount of Your Credit . Taxact online You (or your spouse) were a nonresident alien for any part of 2013 and the nonresident alien did not elect to be treated as a resident alien for tax purposes. Taxact online More information on nonresident aliens can be found in Publication 519. Taxact online You claim the American Opportunity Credit (see chapter 2) or a Tuition and Fees Deduction (see chapter 6) for the same student in 2013. Taxact online What Expenses Qualify The lifetime learning credit is based on qualified education expenses you pay for yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. Taxact online Generally, the credit is allowed for qualified education expenses paid in 2013 for an academic period beginning in 2013 or in the first 3 months of 2014. Taxact online For example, if you paid $1,500 in December 2013 for qualified tuition for the spring 2014 semester beginning in January 2014, you may be able to use that $1,500 in figuring your 2013 credit. Taxact online Academic period. Taxact online   An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. Taxact online In the case of an educational institution that uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. Taxact online Paid with borrowed funds. Taxact online   You can claim a lifetime learning credit for qualified education expenses paid with the proceeds of a loan. Taxact online You use the expenses to figure the lifetime learning credit for the year in which the expenses are paid, not the year in which the loan is repaid. Taxact online Treat loan disbursements sent directly to the educational institution as paid on the date the institution credits the student's account. Taxact online Student withdraws from class(es). Taxact online   You can claim a lifetime learning credit for qualified education expenses not refunded when a student withdraws. Taxact online Qualified Education Expenses For purposes of the lifetime learning credit, qualified education expenses are tuition and certain related expenses required for enrollment in a course at an eligible educational institution. Taxact online The course must be either part of a postsecondary degree program or taken by the student to acquire or improve job skills. Taxact online Eligible educational institution. Taxact online   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. Taxact online S. Taxact online Department of Education. Taxact online It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Taxact online The educational institution should be able to tell you if it is an eligible educational institution. Taxact online   Certain educational institutions located outside the United States also participate in the U. Taxact online S. Taxact online Department of Education's Federal Student Aid (FSA) programs. Taxact online Related expenses. Taxact online   Student-activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses only if the fees and expenses must be paid to the institution for enrollment or attendance. Taxact online Prepaid expenses. Taxact online   Qualified education expenses paid in 2013 for an academic period that begins in the first three months of 2014 can be used in figuring an education credit for 2013 only. Taxact online See Academic period , earlier. Taxact online For example, you pay $2,000 in December 2013 for qualified tuition for the 2014 winter quarter that begins in January 2014, you can use that $2,000 in figuring an education credit for 2013 only (if you meet all the other requirements). Taxact online You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 education credit(s). Taxact online In the following examples, assume that each student is an eligible student at an eligible educational institution. Taxact online Example 1. Taxact online   Jackson is a sophomore in University V's degree program in dentistry. Taxact online This year, in addition to tuition, he is required to pay a fee to the university for the rental of the dental equipment he will use in this program. Taxact online Because the equipment rental fee must be paid to University V for enrollment and attendance, Jackson's equipment rental fee is a qualified expense. Taxact online Example 2. Taxact online   Donna and Charles, both first-year students at College W, are required to have certain books and other reading materials to use in their mandatory first-year classes. Taxact online The college has no policy about how students should obtain these materials, but any student who purchases them from College W's bookstore will receive a bill directly from the college. Taxact online Charles bought his books from a friend, so what he paid for them is not a qualified education expense. Taxact online Donna bought hers at College W's bookstore. Taxact online Although Donna paid College W directly for her first-year books and materials, her payment is not a qualified expense because the books and materials are not required to be purchased from College W for enrollment or attendance at the institution. Taxact online Example 3. Taxact online   When Marci enrolled at College X for her freshman year, she had to pay a separate student activity fee in addition to her tuition. Taxact online This activity fee is required of all students, and is used solely to fund on-campus organizations and activities run by students, such as the student newspaper and student government. Taxact online No portion of the fee covers personal expenses. Taxact online Although labeled as a student activity fee, the fee is required for Marci's enrollment and attendance at College X. Taxact online Therefore, it is a qualified expense. Taxact online No Double Benefit Allowed You cannot do any of the following: Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim a lifetime learning credit based on those same expenses. Taxact online Claim a lifetime learning credit in the same year that you are claiming a tuition and fees deduction for the same student. Taxact online Claim a lifetime learning credit and an American opportunity credit based on the same qualified education expenses. Taxact online Claim a lifetime learning credit based on the same expenses used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or qualified tuition program (QTP). Taxact online See Coordination With American Opportunity and Lifetime Learning Credits in chapter 7, Coverdell Education Savings Account, and Coordination With American Opportunity and Lifetime Learning Credits in chapter 8, Qualified Tuition Program. Taxact online Claim a credit based on qualified education expenses paid with tax-free educational assistance, such as a scholarship, grant, or assistance provided by an employer. Taxact online See Adjustments to Qualified Education Expenses, next. Taxact online This image is too large to be displayed in the current screen. Taxact online Please click the link to view the image. Taxact online Figure 3-1 Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid by or on behalf of that student under the following rules. Taxact online The result is the amount of adjusted qualified education expenses for each student. Taxact online Tax-free educational assistance. Taxact online   For tax-free educational assistance received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. Taxact online See Academic period , earlier. Taxact online   Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. Taxact online This tax-free educational assistance is any tax-free educational assistance received by you or anyone else after 2013 for qualified education expenses paid on behalf of a student in 2013 (or attributable to enrollment at an eligible educational institution during 2013). Taxact online   If this tax-free educational assistance is received after 2013 but before you file your 2013 income tax return, see Refunds received after 2013 but before your income tax return is filed , later. Taxact online If this tax-free educational assistance is received after 2013 and after you file your 2013 income tax return, see Refunds received after 2013 and after your income tax return is filed , later. Taxact online   Tax-free educational assistance includes: The tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Taxact online Generally, any scholarship or fellowship is treated as tax free. Taxact online However, a scholarship or fellowship is not treated as tax free to the extent the student includes it in gross income (if the student is required to file a tax return for the year the scholarship or fellowship is received) and either of the following is true. Taxact online The scholarship or fellowship (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Taxact online The scholarship or fellowship (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Taxact online You may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year it is received. Taxact online For examples, see Coordination with Pell grants and other scholarships, later. Taxact online Refunds. Taxact online   A refund of qualified education expenses may reduce adjusted qualified education expenses for the tax year or require repayment (recapture) of a credit claimed in an earlier year. Taxact online Some tax-free educational assistance received after 2013 may be treated as a refund. Taxact online See Tax-free educational assistance , earlier. Taxact online Refunds received in 2013. Taxact online   For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses for 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. Taxact online Refunds received after 2013 but before your income tax return is filed. Taxact online   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid before you file an income tax return for 2013, the amount of qualified education expenses for 2013 is reduced by the amount of the refund. Taxact online Refunds received after 2013 and after your income tax return is filed. Taxact online   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is paid after you file an income tax return for 2013, you may need to repay some or all of the credit. Taxact online See Credit recapture, next. Taxact online Credit recapture. Taxact online    If any tax-free educational assistance for the qualified education expenses paid in 2013 or any refund of your qualified education expenses paid in 2013 is received after you file your 2013 income tax return, you must recapture (repay) any excess credit. Taxact online You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing the expenses by the amount of the refund or tax-free educational assistance. Taxact online You then refigure your education credit(s) for 2013 and figure the amount by which your 2013 tax liability would have increased if you had claimed the refigured credit(s). Taxact online Include that amount as an additional tax for the year the refund or tax-free assistance was received. Taxact online Example. Taxact online   You pay $9,300 in tuition and fees in December 2013, and your child began college in January 2014. Taxact online You filed your 2013 tax return on February 14, 2014, and claimed a lifetime learning credit of $1,860. Taxact online You claimed no other tax credits. Taxact online After you filed your return, your child withdrew from two courses and you received a refund of $2,900. Taxact online You must refigure your 2013 lifetime learning credit using $6,400 of qualified education expenses instead of $9,300. Taxact online The refigured credit is $1,280 and your tax liability increased by $580. Taxact online See instructions for your 2014 income tax return to determine where to include this tax. Taxact online If you pay qualified education expenses in 2014 for an academic period that begins in the first 3 months of 2014 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2014 instead of reducing your expenses for 2013. Taxact online Amounts that do not reduce qualified education expenses. Taxact online   Do not reduce qualified education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. Taxact online   Do not reduce the qualified education expenses by any scholarship or fellowship reported as income on the student's tax return in the following situations. Taxact online The use of the money is restricted, by the terms of the scholarship or fellowship, to costs of attendance (such as room and board) other than qualified education expenses, as defined in Qualified education expenses in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Taxact online The use of the money is not restricted. Taxact online For examples, see Adjustments to Qualified Education Expenses in chapter 2, American Opportunity Credit. Taxact online Coordination with Pell grants and other scholarships. Taxact online   In some cases, you may be able to reduce your tax liability by including scholarships in income. Taxact online If you are claiming an education credit for a claimed dependent who received a scholarship, you may be able to reduce your tax liability if the student includes the scholarship in income. Taxact online The scholarship must be one that may (by its terms) be applied to expenses (such as room and board) other than qualified education expenses. Taxact online Example 1—No scholarship. Taxact online Judy Green, who is unmarried, is taking courses at a public community college to be recertified to teach in public schools. Taxact online Her AGI and her MAGI, for purposes of the credit, are $27,000. Taxact online Judy takes the standard deduction of $5,950 and personal exemption of $3,800, reducing her AGI to taxable income of $17,250 and her tax before credits is $2,156. Taxact online She claims no credits other than the lifetime learning credit. Taxact online In July 2013 she paid $700 for the summer 2013 semester; in August 2013 she paid $1,900 for the fall 2013 semester; and in December 2013 she paid another $1,900 for the spring semester beginning in January 2014. Taxact online Judy and the college meet all requirements for the lifetime learning tax credit. Taxact online She can use all of the $4,500 tuition she paid in 2013 when figuring her 2013 lifetime learning credit. Taxact online She claims a $900 lifetime learning credit and her tax after credits is $1,256. Taxact online Example 2—Scholarship excluded from income. Taxact online The facts are the same as in Example 1—No scholarship, except that Judy was awarded a $1,500 scholarship. Taxact online Under the terms of her scholarship, it may be used to pay any educational expenses, including room and board. Taxact online If Judy excludes the scholarship from income, she will be deemed (for purposes of computing her education credit) as having used the scholarship to pay for tuition, required fees, and course materials. Taxact online Only $3,000 of the $4,500 tuition she paid in 2013 could be used when figuring her 2013 lifetime learning credit. Taxact online Her lifetime learning credit would be reduced to $600 and her tax after credits would be $1,556. Taxact online Example 3—Scholarship included in income. Taxact online The facts are the same as in Example 2—Scholarship excluded from income. Taxact online If, unlike Example 2, Judy includes the $1,500 scholarship in income, she will be deemed to have used the entire scholarship to pay for room and board. Taxact online Judy's AGI will increase to $28,500, her taxable income would be $18,750, and her tax before credits would be $2,381. Taxact online She would be able to use the $4,500 of adjusted qualified education expenses to figure her credit. Taxact online Judy could claim a $900 lifetime learning credit and her tax after credits would be $1,481. Taxact online Expenses That Do Not Qualify Qualified education expenses do not include amounts paid for: Insurance, Medical expenses (including student health fees), Room and board, Transportation, or Similar personal, living, or family expenses. Taxact online This is true even if the amount must be paid to the institution as a condition of enrollment or attendance. Taxact online Sports, games, hobbies, and noncredit courses. Taxact online   Qualified education expenses generally do not include expenses that relate to any course of instruction or other education that involves sports, games or hobbies, or any noncredit course. Taxact online However, if the course of instruction or other education is part of the student's degree program or is taken by the student to acquire or improve job skills, these expenses can qualify. Taxact online Comprehensive or bundled fees. Taxact online   Some eligible educational institutions combine all of their fees for an academic period into one amount. Taxact online If you do not receive or do not have access to an allocation showing how much you paid for qualified education expenses and how much you paid for personal expenses, such as those listed above, contact the institution. Taxact online The institution is required to make this allocation and provide you with the amount you paid (or were billed) for qualified education expenses on Form 1098-T. Taxact online See Figuring the Credit , later, for more information about Form 1098-T. Taxact online Who Is an Eligible Student For purposes of the lifetime learning credit, an eligible student is a student who is enrolled in one or more courses at an eligible educational institution (as defined under Qualified Education Expenses , earlier). Taxact online Who Can Claim a Dependent's Expenses If there are qualified education expenses for your dependent during a tax year, either you or your dependent, but not both of you, can claim a lifetime learning credit for your dependent's expenses for that year. Taxact online For you to claim a lifetime learning credit for your dependent's expenses, you must also claim an exemption for your dependent. Taxact online You do this by listing your dependent's name and other required information on Form 1040 (or Form 1040A), line 6c. Taxact online IF you. Taxact online . Taxact online . Taxact online THEN only. Taxact online . Taxact online . Taxact online claim an exemption on your tax return for a dependent who is an eligible student you can claim the lifetime learning credit based on that dependent's expenses. Taxact online The dependent cannot claim the credit. Taxact online do not claim an exemption on your tax return for a dependent who is an eligible student (even if entitled to the exemption) the dependent can claim the lifetime learning credit. Taxact online You cannot claim the credit based on this dependent's expenses. Taxact online Expenses paid by dependent. Taxact online   If you claim an exemption on your tax return for an eligible student who is your dependent, treat any expenses paid (or deemed paid) by your dependent as if you had paid them. Taxact online Include these expenses when figuring the amount of your lifetime learning credit. Taxact online    Qualified education expenses paid directly to an eligible educational institution for your dependent under a court-approved divorce decree are treated as paid by your dependent. Taxact online Expenses paid by you. Taxact online   If you claim an exemption for a dependent who is an eligible student, only you can include any expenses you paid when figuring the amount of the lifetime learning credit. Taxact online If neither you nor anyone else claims an exemption for the dependent, only the dependent can include any expenses you paid when figuring the lifetime learning credit. Taxact online Expenses paid by others. Taxact online   Someone other than you, your spouse, or your dependent (such as a relative or former spouse) may make a payment directly to an eligible educational institution to pay for an eligible student's qualified education expenses. Taxact online In this case, the student is treated as receiving the payment from the other person and, in turn, paying the institution. Taxact online If you claim an exemption on your tax return for the student, you are considered to have paid the expenses. Taxact online Example. Taxact online In 2013, Ms. Taxact online Allen makes a payment directly to an eligible educational institution for her grandson Todd's qualified education expenses. Taxact online For purposes of claiming a lifetime learning credit, Todd is treated as receiving the money from his grandmother and, in turn, paying his qualified education expenses himself. Taxact online Unless an exemption for Todd is claimed on someone else's 2013 tax return, only Todd can use the payment to claim a lifetime learning credit. Taxact online If anyone, such as Todd's parents, claims an exemption for Todd on his or her 2013 tax return, whoever claims the exemption may be able to use the expenses to claim a lifetime learning credit. Taxact online If anyone else claims an exemption for Todd, Todd cannot claim a lifetime learning credit. Taxact online Tuition reduction. Taxact online   When an eligible educational institution provides a reduction in tuition to an employee of the institution (or spouse or dependent child of an employee), the amount of the reduction may or may not be taxable. Taxact online If it is taxable, the employee is treated as receiving a payment of that amount and, in turn, paying it to the educational institution on behalf of the student. Taxact online For more information on tuition reductions, see Qualified Tuition Reduction in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. Taxact online Figuring the Credit The amount of the lifetime learning credit is 20% of the first $10,000 of qualified education expenses you paid for all eligible students. Taxact online The maximum amount of lifetime learning credit you can claim for 2013 is $2,000 (20% × $10,000). Taxact online However, that amount may be reduced based on your MAGI. Taxact online See Effect of the Amount of Your Income on the Amount of Your Credit , later. Taxact online Example. Taxact online Bruce and Toni Harper are married and file a joint tax return. Taxact online For 2013, their MAGI is $75,000. Taxact online Toni is attending a local college (an eligible educational institution) to earn credits toward a degree in nursing. Taxact online She already has a bachelor's degree in history and wants to become a nurse. Taxact online In August 2013, Toni paid $5,000 of qualified education expenses for her fall 2013 semester. Taxact online Bruce and Toni can claim a $1,000 (20% × $5,000) lifetime learning credit on their 2013 joint tax return. Taxact online Form 1098-T. Taxact online   To help you figure your lifetime learning credit, the student should receive Form 1098-T. Taxact online Generally, an eligible educational institution (such as a college or university) must send Form 1098-T (or acceptable substitute) to each enrolled student by January 31, 2014. Taxact online An institution may choose to report either payments received (box 1), or amounts billed (box 2), for qualified education expenses. Taxact online However, the amounts in boxes 1 and 2 of Form 1098-T might be different from what you paid. Taxact online When figuring the credit, use only the amounts you paid or are deemed to have paid in 2013 for qualified education expenses. Taxact online   In addition, Form 1098-T should give other information for that institution, such as adjustments made for prior years, the amount of scholarships or grants, reimbursements or refunds, and whether the student was enrolled at least half-time or was a graduate student. Taxact online    The eligible educational institution may ask for a completed Form W-9S, or similar statement to obtain the student's name, address, and taxpayer identification number. Taxact online Effect of the Amount of Your Income on the Amount of Your Credit The amount of your lifetime learning credit is phased out (gradually reduced) if your MAGI is between $53,000 and $63,000 ($107,000 and $127,000 if you file a joint return). Taxact online You cannot claim a lifetime learning credit if your MAGI is $63,000 or more ($127,000 or more if you file a joint return). Taxact online Modified adjusted gross income (MAGI). Taxact online   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return. Taxact online MAGI when using Form 1040A. Taxact online   If you file Form 1040A, your MAGI is the AGI on line 22 of that form. Taxact online MAGI when using Form 1040. Taxact online   If you file Form 1040, your MAGI is the AGI on line 38 of that form, modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. Taxact online You can use Worksheet 3-1 to figure your MAGI. Taxact online Worksheet 3-1. Taxact online MAGI for the Lifetime Learning Credit 1. Taxact online Enter your adjusted gross income  (Form 1040, line 38)   1. Taxact online   2. Taxact online Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)   2. Taxact online       3. Taxact online Enter your foreign housing deduction (Form 2555, line 50)   3. Taxact online       4. Taxact online Enter the amount of income from Puerto Rico you are excluding   4. Taxact online       5. Taxact online Enter the amount of income from American Samoa you are excluding (Form 4563, line 15)   5. Taxact online       6. Taxact online Add the amounts on lines 2, 3, 4, and 5   6. Taxact online   7. Taxact online Add the amounts on lines 1 and 6. Taxact online  This is your modified adjusted  gross income. Taxact online Enter this amount  on Form 8863, line 14   7. Taxact online   Phaseout. Taxact online   If your MAGI is within the range of incomes where the credit must be reduced, you will figure your reduced credit using lines 10-18 of Form 8863. Taxact online The same method is shown in the following example. Taxact online Example. Taxact online You are filing a joint return with a MAGI of $112,000. Taxact online In 2013, you paid $6,600 of qualified education expenses. Taxact online You figure the tentative lifetime learning credit (20% of the first $10,000 of qualified education expenses you paid for all eligible students). Taxact online The result is a $1,320 (20% x $6,600) tentative credit. Taxact online Because your MAGI is within the range of incomes where the credit must be reduced, you must multiply your tentative credit ($1,320) by a fraction. Taxact online The numerator of the fraction is $127,000 (the upper limit for those filing a joint return) minus your MAGI. Taxact online The denominator is $20,000, the range of incomes for the phaseout ($107,000 to $127,000). Taxact online The result is the amount of your phased out (reduced) lifetime learning credit ($990). Taxact online   $1,320 × $127,000 − $112,000  $20,000 = $990   Claiming the Credit You claim the lifetime learning credit by completing Form 8863 and submitting it with your Form 1040 or 1040A. Taxact online Enter the credit on Form 1040, line 49, or Form 1040A, line 31. Taxact online Note. Taxact online In Appendix A, Illustrated Example of Education Credits at the end of this publication, there is an example illustrating the use of Form 8863 when both the American opportunity credit and the lifetime learning credit are claimed on the same tax return. Taxact online Prev  Up  Next   Home   More Online Publications
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Contact My Local Office in Idaho

Face-to-Face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City  Street Address  Days/Hours of Service  Telephone* 
Boise  550 W. Fort St.
Boise, ID 83724 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

Services Provided

(208) 387-2847 
Idaho Falls  1820 E. 17th St.
Idaho Falls, ID 83404 

Monday-Friday - 8:30 a.m.- 4:30 p.m. 
(Closed for lunch 12:00 noon-1:00 p.m.) 

 

Services Provided

(208) 523-8041 
Pocatello  275 S. 5th Ave.
Pocatello, ID 83201 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:00 noon-1:00 p.m.)

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(208) 236-6795 

* Note: The phone numbers in the chart above are not toll free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service: Call 208-363-8900 in the Boise area or 1-877-777-4778 elsewhere, or see  Publication 1546, The Taxpayer Advocate Service of the IRS. For further information, see Tax Topic 104.

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
550 W. Fort Street, MS 6610BOI
Boise, ID 83724

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The Taxact Online

Taxact online Index A Accrual foreign taxes, adjustments, You may have to post a bond. Taxact online Accrual method of accounting, Accrual method of accounting. Taxact online Allocation Carryback/carryover between spouses, Allocations Between Spouses Foreign losses, Foreign Losses Foreign taxes, Allocation of Foreign Taxes U. Taxact online S. Taxact online losses, U. Taxact online S. Taxact online Losses Alternative minimum tax, Reminders Amended return, Claim for Refund American Samoa, resident of, Possession Exclusion Assistance (see Tax help) B Bankruptcy, effect of, Effect of bankruptcy or insolvency. Taxact online Beneficiary, Partner or S corporation shareholder. Taxact online Bond, income tax, You may have to post a bond. Taxact online Boycotting countries, Taxes From International Boycott Operations C Capital gains and losses, Capital Gains and Losses Carryback and carryover, Carrybacks and carryovers. Taxact online Allocations between spouses, Allocations Between Spouses Claim for refund, Time Limit on Tax Assessment Joint return, Married Couples Joint return–deduction year, Joint Return Filed in a Deduction Year Taxes all credited or deducted, Claim for Refund Time limit on tax assessment, Time Limit on Tax Assessment Choice to take credit or deduction Changing your choice, Making or Changing Your Choice Choice applied to all qualified foreign taxes, Choice Applies to All Qualified Foreign Taxes Claim for refund, Claim for Refund Classes of gross income, Classes of gross income. Taxact online Compensation for labor or personal services, Determining the Source of Compensation for Labor or Personal Services Geographical basis, Geographical basis. Taxact online Comprehensive example, Comprehensive Example — Filled-In Form 1116 Controlled foreign corporation shareholder, Controlled foreign corporation shareholder. Taxact online , Income from controlled foreign corporations. Taxact online Covered asset acquisition, Covered Asset Acquisition Credit How to claim, How To Claim the Credit How to figure, How To Figure the Credit Limit on, Limit on the Credit Credit for taxes paid or accrued, Credit for Taxes Paid or Accrued D Deduction for foreign taxes that are not income taxes, Foreign taxes that are not income taxes. Taxact online Distributions Lump-sum, Lump-Sum Distribution Dividends Taxes on, Taxes Imposed on Certain Dividends Dual-capacity taxpayers, Dual-capacity taxpayers. Taxact online E Economic benefits, Specific economic benefit. Taxact online Examples Comprehensive, Comprehensive Example — Filled-In Form 1116 Simple, Simple Example — Filled-In Form 1116 Excess limit, Carryback and Carryover Exchange rates, Foreign Currency and Exchange Rates Excluded income Foreign earned, Foreign Earned Income and Housing Exclusions Taxes on, Taxes on Excluded Income Exemption from foreign tax credit limit, Exemption from foreign tax credit limit. Taxact online Export financing interest, Export financing interest. Taxact online Extraterritorial income, Extraterritorial Income Exclusion F Financial services income, Financial services income. Taxact online Foreign corporation–U. Taxact online S. Taxact online shareholders, filing requirements, Taxes of U. Taxact online S. Taxact online Persons Controlling Foreign Corporations and Partnerships Foreign country, Foreign country. Taxact online Foreign currency and exchange rates, Foreign Currency and Exchange Rates Foreign income, translating, Translating foreign currency into U. Taxact online S. Taxact online dollars. Taxact online Foreign losses Allocation of, Foreign Losses Recapture of, Recapture of Prior Year Overall Foreign Loss Accounts Foreign mineral income, taxes on, Taxes on Foreign Mineral Income Foreign oil and gas extraction income, taxes on, Taxes on Combined Foreign Oil and Gas Income Foreign partnerships–U. Taxact online S. Taxact online partners, filing requirement, Taxes of U. Taxact online S. Taxact online Persons Controlling Foreign Corporations and Partnerships Foreign tax refund, Foreign tax refund. Taxact online , Foreign tax refund. Taxact online Foreign tax(es) Allocation to income categories, Allocation of Foreign Taxes For which you cannot take a credit, Foreign Taxes for Which You Cannot Take a Credit Imposed on foreign refund, Foreign tax imposed on foreign refund. Taxact online Qualifying for credit, What Foreign Taxes Qualify for the Credit? Redetermination, Foreign Tax Redetermination Refund, Foreign tax imposed on foreign refund. Taxact online Form 1040X, Claim for Refund 1116, Form 1116, Simple Example — Filled-In Form 1116, Comprehensive Example — Filled-In Form 1116 5471, Taxes of U. Taxact online S. Taxact online Persons Controlling Foreign Corporations and Partnerships 5713, Form 5713 required. Taxact online 8833, Report required. Taxact online 8865, Taxes of U. Taxact online S. Taxact online Persons Controlling Foreign Corporations and Partnerships 8873, Extraterritorial Income Exclusion Free tax services, Free help with your tax return. Taxact online Functional currency, Translating foreign currency into U. Taxact online S. Taxact online dollars. Taxact online G General category income, separate limit, General Category Income H Help (see Tax help) High-taxed income, High-taxed income. Taxact online I Income from sources in U. Taxact online S. Taxact online possessions, Determining the source of income from U. Taxact online S. Taxact online possessions. Taxact online Income re-sourced by treaty, separate limit, Certain Income Re-Sourced By Treaty Income tax, Income Tax Income tax bond, You may have to post a bond. Taxact online Interest, Penalties and interest. Taxact online Interest expense, apportioning, Interest expense. Taxact online International boycott, Taxes From International Boycott Operations Itemized deduction, Taxes for Which You Can Only Take an Itemized Deduction J Joint return Carryback and carryover, Married Couples Credit based on foreign tax of both spouses, Joint return. Taxact online Filed in a deduction year, Joint Return Filed in a Deduction Year L Levy, Income Tax Limit on credit, Limit on the Credit Losses, foreign, Foreign Losses Allocation of, Foreign Losses Recapture of, Recapture of Prior Year Overall Foreign Loss Accounts Losses, U. Taxact online S. Taxact online , U. Taxact online S. Taxact online Losses Allocation of, U. Taxact online S. Taxact online Losses Lump-sum distributions, Lump-Sum Distribution M Making or changing your choice, Making or Changing Your Choice Married couples Carryback and carryover, Married Couples Joint return, Joint return. Taxact online Mineral income, foreign,, Taxes on Foreign Mineral Income Mutual fund distributions, Mutual fund shareholder. Taxact online , Passive income. Taxact online Mutual fund shareholder, Mutual fund shareholder. Taxact online N Nonresident aliens, Nonresident Aliens Notice to the IRS of change in tax, Notice to the Internal Revenue Service (IRS) of Redetermination O Overall foreign loss, Overall foreign loss. Taxact online P Partner, Partner or S corporation shareholder. Taxact online , Partnership distributive share. Taxact online , Foreign Taxes From a Partnership or an S Corporation Passive category income, Passive Category Income Penalties, Failure-to-notify penalty. Taxact online , Penalties and interest. Taxact online Failure to file Form 5471, 8865, Penalty for not filing Form 5471 or Form 8865. Taxact online Failure to file Form 5713, Penalty for failure to file. Taxact online Failure to notify, foreign tax change, Failure-to-notify penalty. Taxact online Failure to report treaty information, Report required. Taxact online Pension, employment, and disability fund payments, Pension, unemployment, and disability fund payments. Taxact online Personal property, sales or exchanges of, Determining the Source of Income From the Sales or Exchanges of Certain Personal Property Possession exclusion, Possession Exclusion Publications (see Tax help) Purchase or sale of oil or gas, taxes in connection with, Taxes in Connection With the Purchase or Sale of Oil or Gas Q Qualified business unit, Translating foreign currency into U. Taxact online S. Taxact online dollars. Taxact online Qualified dividends, Capital Gains and Losses R Rate of exchange, Rate of exchange for foreign taxes paid. Taxact online Recapture of foreign losses, Recapture of Prior Year Overall Foreign Loss Accounts Records to keep, Records To Keep Redetermination of foreign tax, Foreign Tax Redetermination Refund claims, time limit, Time Limit on Refund Claims Refund, foreign tax, Foreign tax refund. Taxact online Reporting requirements (international boycott), Reporting requirements. Taxact online Resident aliens, Resident Aliens S S corporation shareholder, Partner or S corporation shareholder. Taxact online , Foreign Taxes From a Partnership or an S Corporation Sanctioned countries, Taxes Imposed By Sanctioned Countries (Section 901(j) Income) Section 901(j) income, Section 901(j) Income Section 901(j) sanctioned income, Taxes Imposed By Sanctioned Countries (Section 901(j) Income) Separate limit income, Separate Limit Income General category income, General Category Income Income re-sourced by treaty, Certain Income Re-Sourced By Treaty Lump-sum distribution, Lump-Sum Distribution Passive category income, Passive Category Income Section 901(j) income, Section 901(j) Income Shareholder, Mutual fund shareholder. Taxact online Simple example, Simple Example — Filled-In Form 1116 Soak-up taxes, Soak-up taxes. Taxact online Social security taxes, Pension, unemployment, and disability fund payments. Taxact online Source of compensation for labor or personal services Alternative basis, Alternative basis. Taxact online Multi-year compensation, Multi-year compensation. Taxact online Time basis, Time basis. Taxact online Transportation income, Transportation Income State income taxes, State income taxes. Taxact online Subsidy, Subsidy received. Taxact online T Tax help, How To Get Tax Help Tax treaties, Tax Treaties Taxable income from sources outside the U. Taxact online S. Taxact online , determination of, Determining Taxable Income From Sources Outside the United States Taxes Excluded income, Foreign Earned Income and Housing Exclusions In lieu of income taxes, Taxes in Lieu of Income Taxes On dividends, Taxes Imposed on Certain Dividends Paid or accrued, Credit for Taxes Paid or Accrued Withheld on income or gain, Taxes Withheld on Income or Gain (Other Than Dividends) Taxes related to a foreign tax credit splitting event, Taxes Related to a Foreign Tax Credit Splitting Event Time limit Refund claims, Time Limit on Refund Claims Tax assessment, Time Limit on Tax Assessment Translating foreign currency, Translating foreign currency into U. Taxact online S. Taxact online dollars. Taxact online U U. Taxact online S. Taxact online citizens, U. Taxact online S. Taxact online Citizens U. Taxact online S. Taxact online losses Allocation of, U. Taxact online S. Taxact online Losses U. Taxact online S. Taxact online possessions, U. Taxact online S. Taxact online possessions. Taxact online Unused foreign tax credits, carryback or carryover, Carrybacks and carryovers. Taxact online , Carryback and Carryover W Wages, Wages completely excluded. Taxact online When refunds can be claimed, Time Limit on Refund Claims When tax can be assessed, Time Limit on Tax Assessment Who can take the credit, Who Can Take the Credit? Why choose the credit, Why Choose the Credit? Prev  Up     Home   More Online Publications