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Graduate Education A tuition reduction you receive for graduate education is qualified, and therefore tax free, if both of the following re- quirements are met. • It is provided by an eligible educational institution. • You are a graduate student who performs teaching or research activities for the educational institution. You must include in income any other tuition reductions for graduate education that you receive. How To Report Any tuition reduction that is taxable should be included as wages in box 1 of your Form W-2. Report the amount from box 1 of Form W-2 on Form 1040 or 1040-SR, line 1a. 2. American Opportunity Credit Reminders Educational institution's EIN required. To claim the American opportunity credit, you must provide the educa- tional institution's employer identification number (EIN) on your Form 8863. You should be able to obtain this infor- mation from Form 1098-T or the educational institution. Form 8862 may be required. If your American opportu- nity credit was denied or reduced for any reason other than a math or clerical error for any tax year beginning af- ter 2015, you must attach a completed Form 8862, Infor- mation To Claim Certain Credits After Disallowance, to your tax return for the next year for which you claim the credit. See Form 8862 and its instructions for details. Form 1098-T requirement. To be eligible to claim the American opportunity 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 the credit if the student doesn't receive a Form 1098-T because the student's ed- ucational institution isn't required to furnish a Form 1098-T to the student under existing rules (for example, if the stu- dent is a qualified nonresident alien, has qualified educa- tion expenses paid entirely with scholarships, has quali- fied education expenses paid under a formal billing arrangement, or is enrolled in courses for which no aca- demic credit is awarded). If a student's educational institu- tion isn't required to provide a Form 1098-T to the student, you may claim the credit without a Form 1098-T if you oth- erwise qualify, can demonstrate that you (or a dependent) were enrolled at an eligible educational institution, and can substantiate the payment of qualified tuition and rela- ted expenses. You may also claim a credit if the student attended an eligible educational institution required to furnish Form 1098-T but the student doesn't receive Form 1098-T be- fore 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, 2023, but before you file your 2022 tax 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 ef- forts 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 enrol- led at an eligible educational institution, and substantiate the payment of qualified tuition and related expenses. 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 Caution under Introduction below. Taxpayer identification number (TIN) needed by due date of return. If you haven't been issued a TIN by the due date of your 2022 return (including extensions), you can't claim the American opportunity credit on either your original or an amended 2022 return. Also, the American opportunity credit isn't allowed on either your original or an amended 2022 return for a student who hasn't been is- sued a TIN by the due date of your return (including exten- sions). Introduction For 2022, there are two tax credits available to help you offset the costs of higher education by reducing the amount of your income tax. They are the American oppor- tunity credit (this chapter) and the lifetime learning credit (chapter 3). This chapter explains: • Who can claim the American opportunity 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. What is the tax benefit of the American opportunity credit? For 2022, you may be able to claim a credit of up to $2,500 for adjusted qualified education expenses paid for each student who qualifies for the American opportu- nity credit. A tax credit reduces the amount of income tax you may have to pay. Unlike a deduction, which reduces the Chapter 2 American Opportunity Credit Page 9