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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 64, 65 Additional tax Coverdell ESA: On excess contributions 43 On taxable distributions 47 IRA distributions, education exception 54 Qualified tuition program (QTP), on taxable distributions 53 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 72 Coordination with Coverdell ESA distributions 46 Coordination with qualified tuition program (QTP) distributions 52 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 9 Armed Forces Health Professions Scholarship and Financial Assistance Program 8 Assistance (See Tax help) Athletic scholarships 6 B Bar review course 62 Bonds, education savings (See Education savings bond program) Business deduction for work-related education 58 Accountable plans 64, 65 Adjustments to qualifying work-related education expenses 64 Allocating meal reimbursements 65 Deductible education expenses 62, 64 Deducting business expenses 65, 66 Double benefit not allowed 64 Education required by employer or by law 59 Education to maintain or improve skills 59 Education to meet minimum requirements 60, 61 Education to qualify for new trade or business 61, 62 Excess expenses, accountable plan 65 Indefinite absence 60 Maintaining skills vs. qualifying for new job 59 Nonaccountable plans 65 Nondeductible expenses 62 Qualified education expenses 62, 64 Recordkeeping requirements 66 Reimbursements, treatment of 64, 65 Tax benefit of 59 Tax-free educational assistance 64 Teachers 61, 62 Temporary absence to acquire education 59 Transportation expenses 62, 63 Travel expenses 63 C Cancellation of student loan (See Student loan cancellation) Candidate for a degree: Scholarships and fellowship grants 6 Change of designated beneficiary: Coverdell ESA 44 Qualified tuition program 54 Comprehensive or bundled fees: American opportunity credit 18 Lifetime learning credit 28 Conventions outside U.S. 63 Coverdell education savings account (ESA) 38-49 Additional tax: On excess contributions 43 On taxable distributions 47 Assets to be distributed at age 30 or death of beneficiary 48 Contribution limits 41, 42 Figuring the limit (Worksheet 6-1) 42 Contributions to 40, 43 Table 6-2 41 Coordination with American opportunity and lifetime learning credits 46 Coordination with qualified tuition program (QTP) 46 Defined 39 Distributions 44, 48 Overview (Table 6-3) 45 Divorce, transfer due to 44 Eligible educational institution 39 Figuring taxable portion of distribution 45 Worksheet 6-3 49 Figuring the taxable earnings in required distribution 48 Losses 47 Modified adjusted gross income (MAGI) 41, 42 Worksheet 6-2 42 Overview (Table 6-1) 39 Qualified education expenses 39, 40 Rollovers 43 Tax benefit of 38 Tax-free distributions 45 Taxable distributions 45-47 Worksheet 6-3 to figure 49 Transfers 43 CPA review course 62 Credits: American opportunity (See American opportunity credit) Lifetime learning (See Lifetime learning credit) Cruises, educational 63 D Deductions (See Business deduction for work-related education) Designated beneficiary: Coverdell ESA 39, 44 Qualified tuition program (QTP) 50, 54 Disabilities, persons with: Impairment-related work expenses 65 Distributions (See specific benefit) Divorce: Coverdell ESA transfer due to 44 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 34 Work-related education 64 E Early distributions from IRAs 54, 55 Eligible educational institution 54 Figuring amount not subject to 10% tax 55 Qualified education expenses 54 Reporting 55 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 56, 57 Claiming exclusion 57 Eligible educational institution 56 Figuring tax-free amount 57 Income level, effect on amount of exclusion 57 Modified adjusted gross income (MAGI) 57 Phaseout 57 Qualified education expenses 56 Publication 970 (2022) Page 77