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529 program (See Qualified tuition program (QTP)) A Academic period: American opportunity credit 12 Lifetime learning credit 24 Student loan interest deduction 32 Accountable plans 65, 66 Additional tax: Coverdell ESA: On excess contributions 44 On taxable distributions 48 IRA distributions, education exception 55 Qualified tuition program (QTP), on taxable distributions 54 Adjusted qualified education expenses (See Qualified education expenses) American opportunity credit: Adjustments to qualified education expenses 14 Claiming dependent's expenses 19, 20 Tuition reduction 20 Claiming the credit 11, 12, 22 Qualifying to claim (Figure 2-1) 13 Contrast to the lifetime learning credits 80 Coordination with Coverdell ESA distributions 47 Coordination with qualified tuition program (QTP) distributions 53 Eligible educational institution 13 Eligible student 18 Requirements (Figure 2-2) 19 Expenses qualifying for 12, 16 Figuring the credit 20 Income level, effect on amount of credit 21 Income limits 21 Modified adjusted gross income (MAGI) 22 Modified adjusted gross income (MAGI) Worksheet 2-1 21 Overview of American opportunity credit (Table 2-1) 11 Phaseout 21 Qualified education expenses 13 Tax benefit of 10 Armed Forces Health Professions Scholarship and Financial Assistance Program 8 Assistance (See Tax help) Athletic scholarships 6 B Bar review course 63 Bonds, education savings (See Education savings bond program) Business deduction for work-related education 59 Accountable plans 65, 66 Adjustments to qualifying work-related education expenses 65 Allocating meal reimbursements 66 Deductible education expenses 63, 65 Deducting business expenses 66, 67 Double benefit not allowed 65 Education required by employer or by law 60 Education to maintain or improve skills 60 Education to meet minimum requirements 61, 62 Education to qualify for new trade or business 62, 63 Excess expenses, accountable plan 66 Indefinite absence 61 Maintaining skills vs. qualifying for new job 60 Nonaccountable plans 66 Nondeductible expenses 63 Qualified education expenses 63, 65 Recordkeeping requirements 67 Reimbursements, treatment of 65, 66 Tax benefit of 60 Tax-free educational assistance 65 Teachers 62, 63 Temporary absence to acquire education 60 Transportation expenses 63, 64 Travel expenses 64 C Cancellation of student loan (See Student loan cancellation) Candidate for a degree: Scholarships and fellowship grants 6 Change of designated beneficiary: Coverdell ESA 45 Qualified tuition program 55 Comprehensive or bundled fees: American opportunity credit 18 Lifetime learning credit 29 Conventions outside U.S. 64 Coverdell education savings account (ESA) 39–50 Additional tax: On excess contributions 44 On taxable distributions 48 Assets to be distributed at age 30 or death of beneficiary 49 Contribution limits 42, 43 Figuring the limit (Worksheet 6-1) 43 Contributions to 41, 44 Table 6-2 42 Coordination with American opportunity and lifetime learning credits 47 Coordination with qualified tuition program (QTP) 47 Defined 40 Distributions 45, 49 Overview (Table 6-3) 46 Divorce, transfer due to 45 Eligible educational institution 40 Figuring taxable portion of distribution 46 Worksheet 6-3 50 Figuring the taxable earnings in required distribution 49 Losses 48 Modified adjusted gross income (MAGI) 42 Worksheet 6-2 43 Overview (Table 6-1) 40 Qualified education expenses 40, 41 Rollovers 44 Taxable distributions 46–49 Worksheet 6-3 to figure 50 Tax benefit of 39 Tax-free distributions 46 Transfers 44 CPA review course 63 Credits: American opportunity (See American opportunity credit) Lifetime learning (See Lifetime learning credit) Cruises, educational 64 D Deductions (See Business deduction for work-related education) Designated beneficiary: Coverdell ESA 40, 45 Qualified tuition program (QTP) 51, 55 Disabilities, persons with: Impairment-related work expenses 67 Distributions (See specific benefit) Divorce: Coverdell ESA transfer due to 45 Expenses paid under decree: American opportunity credit 20 Lifetime learning credit 29 Double benefit not allowed: American opportunity credit 14 Lifetime learning credit 25 Student loan interest deduction 35 Work-related education 65 E Early distributions from IRAs 55, 56 Eligible educational institution 55 Figuring amount not subject to 10% tax 56 Qualified education expenses 55 Reporting 56 Educational assistance, employer-provided (See Employer-pr ovided educational assistance) Education IRA (See Coverdell education savings account (ESA)) Education loans (See Student loan interest deduction) Education savings account (See Coverdell education savings account (ESA)) Education savings bond program: Cashing in bonds tax free 57, 58 Claiming exclusion 58 Eligible educational institution 57 Figuring tax-free amount 58 Income level, effect on amount of exclusion 58 Modified adjusted gross income (MAGI) 58 Phaseout 58 Qualified education expenses 57 Eligible educational institution: American opportunity credit 13 Coverdell ESA 40 Early distributions from IRAs 55 Education savings bond program 57 Lifetime learning credit 24 Qualified tuition program (QTP) 51 Qualified tuition reduction 8 Scholarships and fellowship grants 6, 8 Student loan interest deduction 33 Eligible elementary or secondary school: Coverdell ESA 40 Publication 970 (2021) Page 85