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2021 Instructions for Form 8863 Education Credits (American Opportunity and Lifetime Learning Credits) Department of the Treasury Internal Revenue Service General Instructions Section references are to the Internal Revenue Code unless otherwise noted. Future Developments For the latest information about developments related to Form 8863 and its instructions, such as legislation enacted after they were published, go to IRS.gov/Form8863. What's New Limits on modified adjusted gross income (MAGI). The lifetime learning credit MAGI limit increases to $180,000 if you're married filing jointly ($90,000 if you're filing single, head of household, or qualifying widow(er)). The American opportunity credit MAGI limits remain unchanged. See Table 1 and the instructions for line 3 or line 14. Reminders Form 1098-T requirement. To be eligible to claim the American opportunity credit or the lifetime learning credit, the law requires a taxpayer (or a dependent) to have received Form 1098-T, Tuition Statement, from an eligible educational institution, whether domestic or foreign. However, you may claim one of these education benefits if the student doesn't receive a Form 1098-T because the student’s educational institution isn't required to furnish a Form 1098-T to the student under existing rules (for example, if the student is a qualified nonresident alien, has certain qualified education expenses paid entirely with scholarships, has certain qualified education expenses paid under a formal billing arrangement, or is enrolled only in courses for which no academic credit is awarded). If a student’s educational institution isn't required to provide a Form 1098-T to the student, you may claim one of these education benefits without a Form 1098-T if you otherwise qualify, can demonstrate that you (or a dependent) were enrolled at an eligible educational institution, and can substantiate the payment of qualified tuition and related expenses. You may also claim one of these educational benefits if the student attended an eligible educational institution required to furnish Form 1098-T but the student doesn't receive Form 1098-T before you file your tax return (for example, if the institution is otherwise required to furnish the Form 1098-T and doesn't furnish it or refuses to do so) and you take the following required steps: After January 31, 2022, but before you file the return, you or the student must request that the educational institution furnish a Form 1098-T. You must fully cooperate with the educational institution's efforts to gather the information needed to furnish the Form 1098-T. You must also otherwise qualify for the benefit, be able to demonstrate that you (or a dependent) were enrolled at an eligible educational institution, and substantiate the payment of qualified tuition and related expenses. The amount of qualified tuition and related expenses reported on Form 1098-T may not reflect the total amount of the qualified tuition and related expenses paid during the year for which you may claim an education tax credit. You may include qualified tuition and related expenses that are not reported on Form 1098-T when claiming one of the related credits if you can substantiate payment of these expenses.You may not include expenses paid on the 1098-T that have been paid by qualified scholarships, including those that were not processed by the universities. Form 2555-EZ will no longer be available beginning with tax year 2019. You will file Form 1040 or 1040-SR; all references to these instructions have been revised accordingly. If you need to file a prior year tax return, use the form and instructions revision for that tax year. To claim the American opportunity credit, you must provide the educational institution’s employer identification number (EIN) on your Form 8863. You should be able to get this information from Form 1098-T or the educational institution. Ban on claiming the American opportunity credit. If you claim the American opportunity credit even though you're not eligible, you may be banned from claiming the credit for 2 or 10 years depending on your conduct. See the Caution statement under American Opportunity Credit, later. Taxpayer identification number (TIN) needed by due date of return. If you haven’t been issued a TIN by the due date of your 2021 return (including extensions), you can’t claim the American opportunity credit on either your original or an amended 2021 return. Also, the American opportunity credit isn’t allowed on either your original or an amended 2021 return for a student who hasn’t been issued a TIN by the due date of your 2021 return (including extensions). Form 8862 may be required. If your American opportunity credit was denied or reduced for any reason other than a math or clerical error for any tax year beginning after 2015, you must attach a completed Form 8862, Information To Claim Certain Refundable Credits After Disallowance, to your tax return for the next tax year for which you claim the credit. See Form 8862 and its instructions for details. Purpose of Form Use Form 8863 to figure and claim your education credits, which are based on adjusted qualified education expenses paid to an eligible educational institution (postsecondary). For 2021, there are two education credits. • The American opportunity credit, part of which may be refundable. • The lifetime learning credit, which is nonrefundable. A refundable credit can give you a refund when the credit is more than the tax you owe, even if you aren’t required to file a tax return. A nonrefundable credit can reduce your tax, but any excess isn't refunded to you. Both of these credits have different rules that can affect your eligibility to claim a specific credit. These differences are shown in Table 1. CAUTION ! Sep 21, 2021 Cat. No. 53002G