Where do I enter education credits and deductions for taxpayers and dependents in Drake Tax?
The education credits, Lifetime Learning and American Opportunity Credits, can be taken only for a dependent, taxpayer, or spouse. There are limitations for each of these credits, see Related Links for details. Lifetime Learning and American Opportunity credits are entered on the 8863 screen and education credits appear on Form 8863 in view. The form is not produced in view if the taxpayer does not qualify for the benefit.
The Tuition and Fees deduction (Form 8917) was repealed and is no longer available after Drake20.
On the 8863 screen, begin by choosing the student’s SSN from the drop list under Student’s SSN; if the student's name is not showing in the list, ensure that you have entered them in on Screen 2 - Dependents. Once entered, if a dependent who is over 18 does not show on the list, check data entry for that dependent to be sure Over 18 and a student has been selected. You may need to recalculate the return to have the SSN appear in the drop list.
A separate 8863 screen is needed for each student for whom a credit is claimed. If the same student attended multiple schools, use the Educational Institutions tab located at the top of the 8863 screen. Enter in applicable expenses and education assistance amounts in the lines below question 26 on the screen. Then, check the education benefit being claimed to have the software calculate the credit amount for the student. These check-boxes are mutually exclusive since two credits cannot be claimed for the same individual in the same year.
Note about Qualified Education Expenses:
Per the 8863 Instructions, each credit only allows certain expenses to be included for the credit calculation. You can enter the amounts as applicable on the 8863 screen and Drake Tax will only carry the allowable amount to the form. This is why there are separate lines for expenses required to be paid (red) and additional expenses not required to be paid (blue) to the educational institution:
- American opportunity credit: Qualified education expenses include amounts paid for tuition, fees, and course materials, which include books, supplies, and equipment needed for a course of study, whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance.
- Lifetime learning credit: Qualified education expenses include amounts paid for books, supplies, and equipment only if required to be paid to the institution as a condition of enrollment or attendance.
- The credit will only be based on the amounts required to be paid (red box above).
On a scale of 1-5, please rate the helpfulness of this article
Optionally provide private feedback to help us improve this article...
Thank you for your feedback!