I thought the max refund for the AOTC was supposed to be $1000. But when I put my info in TaxAct and TurboTax, they both show over $1000 just for education. TaxAct is even showing more than $2000, and TurboTax says $1402. This doesn’t seem right to me. Am I missing something? I’ve never had any weird issues like this with tax software before.
The refundable part of the credit is what you can get back even if you don’t owe any taxes. The rest just reduces what you owe.
For example, if you owe $400 in taxes, have $2500 in credits, and already paid $400 in withholding, your tax owed becomes zero. That leaves $2100 in credits. Only $1000 can be refunded, so that’s what you’d get. The rest just means you didn’t owe as much tax.
@Shannon
That’s not the case here. The $1400 shows up specifically under the education credits section. The rest of my refund from overpaid taxes is listed separately as overpayments. My overpayments are $1040, but TurboTax says my total refund would be over $2400. There are no other credits being added.
Here’s a screenshot of what I mean. This is showing up in the refund section after finishing the return, not just the total credit I qualified for. I did qualify for the full $2500 credit.
@Tegan
You might want to fill out Form 8863 by hand and check the numbers. Without seeing your whole return, it’s hard to tell what’s going on.
If the two results don’t match exactly, then something must have been entered differently.
It might have to do with your education credits or some other part of your return. If you input everything the same way, including all income and W-2s, and answered all questions the same, then both programs should give the same result.
Without seeing all the details of your return, it’s hard to say what’s going wrong. Remember, only part of the credit is refundable. The rest might just be reducing your tax liability.
@Carter
I’m only dealing with the AOTC here. I entered my 1098-T info and didn’t mess with student loan interest credits or anything else. From what I know, only the AOTC is refundable, and it’s capped at $1000. So if my refund is just from the AOTC, shouldn’t it stop at $1000?
Sorry if I’m a bit slow on this stuff, I’m trying to understand 
.
As others have said, it’s probably a difference in how you answered something in the two programs. Maybe you skipped a question, or maybe they use different defaults.
If you want better help, post redacted screenshots of Form 1040 and Form 8863. Without that, people are just guessing.
If you haven’t paid yet and can’t view the forms, you could try a free service like FreeTaxUSA.
@Dallas
Thanks! My question is more about whether it’s even possible to get more than $1000 as a refundable amount from education credits. I thought only the AOTC could refund up to $1000, so I’m confused why both programs are showing more than that. I’m not including anything about student loans here, just what’s on the 1098-T. Does that make sense?
@Tegan
You’re right. The max refundable amount from the AOTC is $1000. You shouldn’t be getting more than that from education credits alone.
Indigo said:
@Tegan
You’re right. The max refundable amount from the AOTC is $1000. You shouldn’t be getting more than that from education credits alone.
That’s what I thought too. Both programs are showing over $1000 just from education credits though, and I can’t figure out why.
@Tegan
The $1000 cap only applies to the refundable part. You can still get the rest of the credit to reduce your taxes owed.
So if you get $1400 in education credit, that’s $1400 less tax you owe. If you owed nothing, you’d get $1000 back, and the extra $400 just disappears.
But if you owed $400 in taxes, the whole $1400 helps you.
@Paris
Right, I got the full $2500 credit. But in the refund section, it shows $1400 as refundable from education credits. My overpaid taxes add up to $1040, making my total refund over $2400. I’ll try filling out the form by hand tomorrow, but I’m pretty sure this is a software issue. I’ve double-checked everything several times.
The AOTC can give you up to $2500 in total credit, with $1000 being refundable and the rest just reducing taxes owed.
To check if the software is right, you could manually fill out Form 8863. On that form, line 8 shows the refundable part, and line 19 shows the non-refundable part. Line 8 is capped at $1000, but line 19 can be more, depending on your tax situation.
@Bao
I haven’t submitted my return yet, so I don’t think the forms are generated. Both programs just show a projected refund. They split the numbers between overpayments and education credits, and both show more than $1000 for education credits alone. My overpaid taxes are $1040, and that’s separate. TurboTax says my total refund is over $2400, with $1400 coming from education credits. I’m just confused .
@Tegan
Does box 1 on your 1098-T show $1400 more than box 5? If your eligible expenses after scholarships are less than $2000, you’ll only get a credit for that amount. You could try FreeTaxUSA—they show the forms before you pay.
@Bao
The difference between box 1 and box 5 is $6869.15. My employer also gave me $3800 for tuition reimbursement. I’ll try both suggestions tomorrow. Thanks a lot!