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Educational Tax Credit

Tax benefits exist in the form of credits and deductions for those paying for higher education. We encourage students and their families to take advantage of such benefits offered in an effort to reduce the cost burden of college. Please read below and explore the links provided for more information.

Please note: Not all students or expenses are eligible for education tax benefits

Credits

An education credit helps with the cost of higher education by reducing the amount of tax owed on a tax return. If the credit reduces the taxes owed to less than zero, students and families may get a tax refund. There are two education credits available: the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit.

Who Can Claim an Education Credit?

There are additional rules for each credit, but those seeking to claim them must meet all three of the following requirements for either credit:

  1. Individual, their dependent or a third party pays qualified education expenses for higher education.
  2. An eligible student must be enrolled at an eligible educational institution.
  3. The eligible student is the individual, their spouse or a dependent they list on their tax return.

The IRS has created an interactive tool to determine eligibility for education credits available here. 

If eligible to claim the lifetime learning credit and also eligible to claim the American opportunity credit for the same student in the same year, individuals and families can choose to claim either credit, but not both.

The AOTC may not be claimed if a student was a nonresident alien for any part of the tax year unless they elect to be treated as a resident alien for federal tax purposes. For more information about AOTC and foreign students, visit American Opportunity Tax Credit - Information for Foreign Students.

Deductions

Deductions reduce the amount of income that is subject to tax, thus generally reducing the amount of tax that must be paid. There are several education deductions available including those related to tuition and fees as well as student loan interest paid. For more information please visit the IRS Tax Benefits for Education Information Center.

1098-T Form

A 1098-T is provided to undergraduate students by the beginning of February provided the student was enrolled at any time in the previous calendar year. Students not part of an undergraduate program, such as Continuing Education or Adult Education do not receive a 1098-T. If a student was enrolled and dropped from their course(s) but were not billed, they will not receive a 1098-T. 

Form 1098-T is mailed to the home address associated with a student’s account. Additionally, this form is posted online if they have provided their consent (through the MyTriton Portal in the Financial Information tab under “1098 Electronic Consent”).

Students or those claiming a student as a dependent may be able to claim an education credit on tax form 1040 or 1040A. Education credits may only be claimed for qualified tuition and related expenses that were actually paid during the tax year for which the return is being filed. 

Institutions may report either payments received during the calendar year in box 1 or amounts billed during the calendar year in box 2. Triton College reports amounts billed (Box 2) data only. This may represent an amount other than the amount actually paid during the calendar year. 

We ask that students make certain that Triton College has their correct social security number on file.  Updates to the W9S form can be made in the Admission and Records Office, Room B216E, if any correction is needed.

Although Triton College may be able to answer certain questions about the 1098-T statement, please do not contact the institution for explanations of the requirements for (and how to figure) any education credit that tax filer may claim.  For more information regarding education tax credits, eligibility requirements, and for help calculating the amount of you credit please visit www.IRS.gov and view Pub 970, Tax Benefits for Education; Form 8863, Education Credits, and the Form 1040 or 1040A instructions.