The U.S. tax code offers tax credits and deductions to reduce the federal income tax burden for students or those paying the costs of a student’s higher education. Tax credits directly reduce the amount of income tax owed, while deductions reduce a person’s taxable income.
The Lifetime Learning Credit is a tax credit for qualified education expenses paid for an eligible student enrolled at an eligible educational institution, including the UW. This tax credit lets a taxpayer claim 20 percent of the first $10,000 of qualified education expenses or a maximum credit of $2,000 per calendar year. The credit is available to parents of dependent students or to students who are not claimed as dependents on their parents’ federal tax return. The maximum credit is $2,000 per family. Taxpayers cannot claim more than one credit in the same year for the same student.
There is no limit on the number of years the Lifetime Learning Credit can be claimed for a student. Eligibility is subject to income limitations, however, so please consult IRS guidelines.
Per IRS regulation, the UW reports all tuition charges and financial aid on a student’s 1098-T. If you were enrolled in credit courses the previous tax year, the UW will mail you a 1098-T at the end of January. You may also access your 1098-T statement online from the Student Finances tab of MyUW. Because you do not submit the 1098-T form to the IRS, an official copy is not necessary to claim a tax credit.
Traditionally, only students enrolled in credit courses received a 1098-T. But because the IRS has broadened the definition of what noncredit coursework is deductible, starting in the 2016 tax year, the UW will begin issuing 1098-Ts for students enrolled in noncredit courses as well. Consult the IRS or your tax adviser to determine if you are eligible for a tax deduction. Receipt of a 1098-T does not guarantee that the amount is deductible on your tax return.
If you have questions about your 1098-T or need corrections made to it, contact the UWPCE accounting office at firstname.lastname@example.org or 206-685-6330. When emailing, include your student ID number and what you think needs to be corrected. You may ask to have a corrected 1098-T mailed to you, or you can print the corrected form from MyUW.
Use IRS Form 8863 to determine the credit you can claim. Be sure to read the instructions that accompany the form.
If you need further assistance, contact the IRS or a tax adviser. The UW cannot help you determine your eligibility or calculate the credit.