Form 1098-T Education Tuition Tax Credit Calculator 2026
Calculate the American Opportunity Credit (AOTC) and Lifetime Learning Credit (LLC) from your 1098-T form. Compare credits, model MAGI phase-outs, and optimize education tax credits for multiple students.
Form 1098-T Data
$
Qualified tuition and fees paid to the institution $
Grants reduce qualifying expenses (net = Box 1 β Box 5) $
Your AGI plus excluded foreign income, tax-free bond interest AOTC limited to first 4 years of post-secondary education
AOTC can only be claimed 4 times total per student
AOTC requires at least half-time enrollment
$0
Recommended Credit
$0
AOTC (max $2,500)
$0
LLC (max $2,000)
$0
Net Qualifying Expenses
Education Credit Calculation
| Component | AOTC | LLC |
|---|
How Education Tax Credits Work in 2026
Two credits can reduce your tax based on Form 1098-T data: the American Opportunity Tax Credit (AOTC) for students in their first four years, and the Lifetime Learning Credit (LLC) for any year of post-secondary education. You cannot claim both for the same student. Net qualifying expenses = Box 1 minus Box 5, and you cannot claim more than you actually paid after scholarships.
The Formula
Net Qualifying Expenses = max(0, Box 1 β Box 5)
AOTC = min($2,500, 100% Γ min($2,000, expenses) + 25% Γ min($2,000, max(0, expenses β $2,000)))
AOTC Phase-Out: MAGI $80Kβ$90K (single) / $160Kβ$180K (MFJ)
LLC = min($2,000, 20% Γ min($10,000, expenses))
LLC Phase-Out: same thresholds as AOTC
AOTC Refundable: 40% of credit (up to $1,000)
AOTC = min($2,500, 100% Γ min($2,000, expenses) + 25% Γ min($2,000, max(0, expenses β $2,000)))
AOTC Phase-Out: MAGI $80Kβ$90K (single) / $160Kβ$180K (MFJ)
LLC = min($2,000, 20% Γ min($10,000, expenses))
LLC Phase-Out: same thresholds as AOTC
AOTC Refundable: 40% of credit (up to $1,000)
Sources and References (click to expand)
- IRC Β§25A β American Opportunity and Lifetime Learning Credits (eligibility, computation, phase-out)
- IRS Form 1098-T Instructions β Box 1, Box 5, scholarship reporting rules
- IRS Publication 970 β Tax Benefits for Education (AOTC, LLC, and qualifying expenses)
- IRS Form 8863 β Education Credits (American Opportunity and Lifetime Learning Credits)
- Treasury Reg Β§1.25A-5 β Qualified tuition and related expenses (definition and allocation rules)
Extended
Multi-Year Multi-Student Planning Calculator
Track AOTC over 4 years per student. Model which student gets AOTC vs LLC. Bar chart of credits by year.
Track AOTC eligibility over 4 years per student and optimize credit allocation across multiple students.
| Student | Year in College | AOTC Eligible? | AOTC (max) | LLC Alternative | Recommended |
|---|
4-Year Credit Projection (Student 1)
Frequently Asked Questions
What is Form 1098-T and who receives it?
Form 1098-T (Tuition Statement) is issued by eligible educational institutions to students who paid qualified tuition and related expenses during the year. Box 1 reports the amount of payments received by the institution for qualified tuition and fees. Box 5 reports scholarships and grants received. You use Form 1098-T to claim the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit (LLC) on your federal return. Not all students receive a 1098-T β institutions may not be required to issue one if courses are not-for-credit or if the student's fees are waived.
What is the American Opportunity Tax Credit (AOTC)?
The AOTC (IRC Β§25A(b)) provides up to $2,500 per eligible student per year β 100% of the first $2,000 in qualifying expenses plus 25% of the next $2,000. It is available for the first four years of post-secondary education, requires the student to be enrolled at least half-time, and requires no prior felony drug conviction. Up to 40% of the AOTC (up to $1,000) is refundable β meaning you can receive it even if you owe no tax. MAGI phase-out: $80,000β$90,000 (single) and $160,000β$180,000 (married filing jointly) for 2026.
What is the Lifetime Learning Credit (LLC)?
The LLC (IRC Β§25A(c)) provides 20% of up to $10,000 in qualifying expenses = up to $2,000 maximum per tax return (not per student). It is available for any year of post-secondary education and for courses to acquire job skills. Unlike the AOTC, the LLC is not refundable and applies per return β not per student, making it less valuable for families with multiple students. The LLC has the same MAGI phase-out as the AOTC: $80Kβ$90K single, $160Kβ$180K MFJ in 2026.
Can I claim both the AOTC and the LLC?
No. You cannot claim both the AOTC and the LLC for the same student in the same year. However, if you have multiple students, you can claim AOTC for one student and LLC for another β but the LLC is still limited to $2,000 per return regardless of the number of students. In general, the AOTC provides more value per student (up to $2,500 vs $2,000 max for LLC) and has a refundable component, so most families prefer AOTC for eligible first-year through fourth-year students and LLC for graduate students or fifth-year+ undergraduates.
What are "qualifying expenses" for the AOTC and LLC?
Qualifying expenses for both credits include tuition and required fees paid to an eligible institution. Room and board, insurance, transportation, personal expenses, and optional equipment costs do NOT qualify. For the AOTC, course-related books, supplies, and equipment required for enrollment or attendance (even if purchased outside the institution) qualify. For the LLC, only amounts paid to the institution for tuition and fees qualify β not books or supplies purchased elsewhere. Net qualifying expenses = Box 1 β Box 5 (scholarships and grants). This net amount cannot be negative for credit calculation purposes.