Why would Proseries not apply the refundable portion of the American Opportunity Credit?

[davetodd11]

Taxpayer (Single, not claimed on anyone else's return) qualifies for American Opportunity Credit, but Proseries Form 8863 is only applying the non-refundable portion.  The box on line 7 is being automatically checked, and line 8 is blank.  What could I be missing that would cause the line 7 box to be checked?

[dkh]

Well...F8863 line 7 says .... if under age 24 AND meet conditions described in instructions  - skip line 8 enter line 7 on line 9            So you will need to read instructions to see what conditions are being met to cause this.

[Terry53029]

Did you answer questions at very bottom of form 8863 if your client is under age 24

[davetodd11]

I did.  Proseries actually specifically indicates that TP is eligible for the credit.

[dkh]

Are parents alive?   If yes, doesn't qualify for refundable amount.   READ the instructions.  

[Terry53029]

What were your answers to question 1,2, and 3 at the bottom of the 8863

[Terry53029]

@dkh If taxpayer supports himself, and doesn't qualify to be anyone's dependent he is eligibly for the refundable AOTC even if his parents are alive.

[davetodd11]

23 HCS or AOC claimed for 4 year - No (this is the first time claimed)

24 At least half-time - Yes

25 Completed first 4 years of post-secondary ed. - No

26 Convicted of felony - No

[dkh]

ok @Terry53029 ....I read thru instructions - agreed.    But what we don't know is :::  How old is this taxpayer?  And does the taxpayer actually support themself?

[Terry53029]

@davetodd11 You need to go to the bottom of the form 8863 with heading "additional questions for taxpayers who were under 24 at the end of 2020" There are three questions you need to answer 1, 2, and 3

[TaxGuyBill]

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@Terry53029 wrote:

@dkh If taxpayer supports himself, and doesn't qualify to be anyone's dependent he is eligibly for the refundable AOTC even if his parents are alive.

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He must provide over half of his support with EARNED income.

[dkh]

See what is or is not checked on the Federal Information Worksheet  Part X - Dependent of Someone Else

[davetodd11]

In the information worksheet, I have indicated that the taxpayer cannot be claimed by another.

Proseries is giving the entire amount of the $2,500 credit as non-refundable.  Since it ultimately works out the same on this particular return, I'm just going to leave it as PS has it calculated.