Reviewed and updated October 16, 2026
Rules and decisions to review
- The American opportunity tax credit and lifetime learning credit have different eligibility rules. They cannot both be claimed for the same student in the same tax year.
- Form 1098-T is a starting point, not a complete expense calculation. Reconcile it with the school account and actual payment records.
- Tax-free scholarships, employer assistance and tax-free 529 distributions can reduce the expenses available for an education credit.
- A student may have a filing requirement for wages or taxable scholarship amounts even if someone else claims the student as a dependent.
A practical example
If tuition was paid with both a tax-free scholarship and family funds, the full tuition bill cannot automatically be used for a credit. The funding sources and qualifying costs must first be allocated.
Records to gather
Gather Form 1098-T, tuition ledger, book receipts, scholarship terms, 529 statements and dependency information.
Your next step
Reconcile tuition and other qualifying expenses against scholarships and education-account distributions. Determine who claims the student before choosing a credit, and keep a clear allocation of each dollar used.
Official sources
This guide provides general information. The rules depend on the tax year, jurisdiction and your circumstances. Ask our team which filing or planning steps apply to you.
