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Entering amounts in Form 1098-T and generating Form 8863 in ProConnect

SOLVEDby IntuitProConnect Tax72Updated July 14, 2022

This article will assist you with entering information from Form 1098-T in Intuit ProConnect. Form 1098-T is informational only. It alerts students that they may be eligible for education credits, but it doesn't contain all of the information needed to claim those credits.

Tuition and Fees Deduction (Form 8917) has been repealed starting in Tax Year 2021.

American Opportunity Credit & Lifetime Learning Credit (Form 8863)

  • Expanded Lifetime Learning Credit to phase outs that mirror American Opportunity Credit in 2021
  • MAGI phase out range --$160,000 --$180,000 married filing joint; $80,000 --$90,000 other filers

Before you start

  • ProConnect doesn’t have input fields for Form 1098-T Box 6, Adjustments to Scholarships or Grants for a Prior Year, or Box 7, Checkbox for Amounts for an Academic Period Beginning in January through March of 20YY.
  • Taxable scholarships (as defined in IRS Pub. 970), should be entered on the SS Benefits, Alimony, Miscellaneous Inc. screen, under the Alimony and Other Income section, in the Taxable scholarships and fellowships field.
  • YY represents the two-digit tax year.

The American Opportunity Credit (AOC) is up to $2,500 for qualified tuition and related expenses paid for each eligible student.

The Lifetime Learning Credit (LLC) is 20% of qualified expenses, up to $2,000 per return and not subject to the AOC qualifications. This credit, based on the tuition and expenses of a student, may be claimed regardless of the amount of post-secondary education the student has completed and for an unlimited number of years for the same student. To claim the LLC, the student doesn’t need to be pursuing a degree or other recognized educational credential. The credit is available for one or more courses and the felony drug conviction rule doesn’t apply.

Follow these steps to enter Form 1098-T in an individual return:

  1. Go to the Input Return tab.
  2. From the left of the screen, select Credits and choose Education/Tuition (1098-T, 8863).
  3. Scroll down to the Student Information subsection and enter the required information:
    • If the 1098-T recipient is the taxpayer, or spouse on the return, use the 1=taxpayer, 2=spouse field.
      • The student's name and Social Security number don't need to be reentered here.
    • If the 1098-T recipient is a dependent on the return, use the Dependent number field. The dependent number corresponds to the order in which dependents are entered on the General > Dependents screen.
      • For example, if the student is the second dependent entered, their dependent number is 2. You don't need to reenter the student's name or Social Security number if you use this field.
  4. Scroll down to the American Opportunity Credit (AOC) Disqualifiers section and enter the following information:
    • Number of prior years Hope credit claimed
    • Number of prior years AOC claimed
      • If the combined number of prior years that the Hope Credit and AOC was claimed is 4+ years, the student is disqualified from the AOC, and the program applies the LLC.
  5. Check any of the remaining boxes in this section, if applicable.
    • Any of these boxes selected will disqualify the student from taking the AOC, and the program will apply the LLC.

Force Lifetime Learning Credit (LLC): select this box to force the LLC when the student otherwise qualifies for the AOC.  If all of the following are true, based on the entries (or absence of entries) in this section, the program applies the AOC:

  • The combined number of prior years that the Hope Credit and AOC was claimed is less than 4 years.
  • The student was enrolled at least half-time for at least one academic period that began in the current year (or the first 3 months of the next year if the qualified expenses were paid in the current year) at an eligible educational institution in a program leading to a post-secondary degree, certificate, or other recognized post-secondary educational credential
  • The student hadn't completed the first 4 years of post-secondary education before the current year.
  • The student wasn't convicted before the end of the current year of a felony for possession or distribution of a controlled substance.
  1. Scroll down to the Educational Institution Attended subsection and enter the following information about the educational institution:
    • Name
    • Address
    • Federal ID number
  2. Mark any applicable checkboxes in this section.
    • 20YY Form 1098-T wasn't received: Select this box if the student didn’t receive Form 1098-T from this institution for 20YY to answer No to the question on Form 8863, page 2.  If a Form 1098-T was received, you must provide the institution's Federal ID number from Form 1098-T.
    • 20YY Form 1098-T received with Box 7 completed: tThis box is used for proforma purposes only, so the question regarding receipt of a prior year 1098-T with box 7 checked will be answered accordingly on next year's Form 8863.
    • [Prior tax year] Form 1098-T received with Box 7 completed: Select this box if the student received Form 1098-T from this institution for 20YY with box 7 checked. If this box is selected, you must also provide the institution's Federal ID number from Form 1098-T.
  3. Scroll down to the Current Year Expenses subsection.
  4. Enter the Qualified tuition and fees (net of nontaxable benefits)
    • You may be required to reduce the Qualified tuition and fees (net of nontaxable benefits) amount for scholarships reported on the 1098-T, box 5.
    • These are amounts required for enrollment or attendance at an eligible educational institution, and will be used to calculate the credit or deduction on any one of the benefits being claimed.
    • If the taxpayer is claiming other education benefits, don’t enter expenses here that are being used to figure the tax-free portion of the other benefit (for example, ESAs or QTPs).
    • Qualified expenses for the AOC, LLC, and Tuition and Fees deduction vary.
  5. Enter the Books and supplies required to be purchased from the institution.
    • This field will be used to calculate the credit or deduction on any of the benefits claimed.
  6. Enter the Books and supplies not entered above (AOC only).
    • This field will be used to calculate the AOC only and won't be included in calculating the LLC or Tuition and Fees deduction.
  7. Use the Additional Institutions Attended subsection if the same student received multiple Forms 1098-T.
    • For additional students, select the + (plus sign) at the top of your screen to add a new tab.

There's no specific field to enter scholarships received on a Form 1098-T, box 5. However, scholarships may affect the adjusted qualified education expenses eligible for education credits on Form 8863. Refer to IRS Pub. 970 for determining if this adjustment needs to be made for the client's specific tax situation.

To enter an adjustment for the 8863:

  1. Go to the Input Return tab.
  2. On the left-side navigation menu, select Credits.
  3. Click on Education/Tuition (1098-T) (8863).
  4. Scroll down to the Current Year Expenses section.
  5. In the Qualified tuition and fees (net of nontaxable benefits) field, enter the net amount of 1098-T, box 1, and 1098-T, box 5.

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