U.S. Individual Income Tax Return

2012

Instructions for Form 8863

Department of the Treasury
Internal Revenue Service

Education Credits (American Opportunity and Lifetime Learning Credits)
Section references are to the Internal Revenue Code unless
otherwise noted.

General Instructions

Both of these credits have different rules that can affect your
eligibility to claim a specific credit. These differences are shown
in Table 1 below.

Who Can Claim an Education Credit

What's New
New format for Form 8863. Form 8863 has a new format for
the 2012 year. Begin on page 2, and complete a separate Part III
on page 2 for each individual for whom you are claiming either
credit (American opportunity credit or lifetime learning credit)
before you complete Parts I and II.

Purpose of Form

Use Form 8863 to figure and claim your education credits, which
are based on qualified education expenses paid to an eligible
postsecondary educational institution. For 2012, there are two
education credits.
The American opportunity credit, part of which may be
refundable.
The lifetime learning credit, which is nonrefundable.
A refundable credit can give you a refund for any part of the
credit that is more than your total tax. A nonrefundable credit
can reduce your tax, but any excess is not refunded to you.

You may be able to claim an education credit if you, your
spouse, or a dependent you claim on your tax return was a
student enrolled at or attending an eligible educational
institution. The credits are based on the amount of adjusted
qualified education expenses paid for the student in 2012 for
academic periods beginning in 2012 or beginning in the first 3
months of 2013.
Academic period. An academic period is any quarter,
semester, trimester, or any other period of study as reasonably
determined by an eligible educational institution. If an eligible
educational institution uses credit hours or clock hours and does
not have academic terms, each payment may be treated as an
academic period. For details, see Academic period in chapters 2
and 3 of Pub. 970.
Qualified education expenses for any academic period
must be reduced by any tax-free educational assistance
CAUTION
allocable to that academic period. See Adjusted
Qualified Education Expenses, later.

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Who can claim a dependent's expenses. If a student is
claimed as a dependent on another person's tax return, all

Table 1. Comparison of Education Credits
Caution. You can claim both the American opportunity credit and the lifetime learning credit on the same
return-but not for the same student.
American Opportunity Credit

Lifetime Learning Credit

Maximum credit

Up to $2,500 credit per eligible student

Up to $2,000 credit per return

Limit on modified
adjusted gross income
(MAGI)

$180,000 if married filing jointly;
$90,000 if single, head of household, or qualifying
widow(er)

$124,000 if married filing jointly;
$62,000 if single, head of household, or qualifying
widow(er)

Refundable or
nonrefundable

40% of credit may be refundable; the rest is
nonrefundable

Nonrefundable—credit limited to the amount of tax you
must pay on your taxable income

Number of years of
postsecondary education

Available ONLY if the student had not completed the first
4 years of postsecondary education before 2012

Available for all years of postsecondary education and for
courses to acquire or improve job skills

Number of tax years
credit available

Available ONLY for 4 tax years per eligible student
(including any year(s) Hope credit was claimed)

Available for an unlimited number of years

Type of program required

Student must be pursuing a program leading to a degree
or other recognized education credential

Student does not need to be pursuing a program leading
to a degree or other recognized education credential

Number of courses

Student must be enrolled at least half time for at least
one academic period beginning during the year

Available for one or more courses

Felony drug conviction

As of the end of 2012, the student had not been
convicted of a felony for possessing or distributing a
controlled substance

Felony drug convictions do not make the student
ineligible

Qualified expenses

Tuition, required enrollment fees, and course materials
that the student needs for a course of study whether or
not the materials are bought at the educational institution
as a condition of enrollment or attendance

Tuition and required enrollment fees (including amounts
required to be paid to the institution for course-related
books, supplies, and equipment)

Payments for academic
periods

Payments made in 2012 for academic periods beginning in 2012 or beginning in the first 3 months of 2013

Jan 11, 2013

Cat. No. 53002G

because of the student's performance on proficiency
examinations.
2. Neither the American opportunity credit nor the Hope
Scholarship credit has been claimed (by you or anyone else) for
this student for any four prior tax years.

qualified education expenses of the student are treated as
having been paid by that person. Therefore, only that person can
claim an education credit for the student. If a student is not
claimed as a dependent on another person's tax return, only the
student can claim a credit.
Expenses paid by a third party. Qualified education
expenses paid on behalf of the student by someone other than
the student (such as a relative) are treated as paid by the
student. However, qualified education expenses paid (or treated
as paid) by a student who is claimed as a dependent on your tax
return are treated as paid by you. Therefore, you are treated as
having paid expenses that were paid by the third party. For more
information and an example, see Who Can Claim a Dependent's
Expenses in Pub. 970, chapter 2 or 3.

Example. Sally was eligible for the Hope scholarship credit
in 2006 and 2007 and for the American opportunity credit in
2009 and 2011. Her parents claimed the Hope scholarship credit
for Sally on their tax return for 2006 and 2007 and claimed the
American opportunity credit for Sally on their 2009 tax return.
Sally claimed the American opportunity credit on her 2011 tax
return. Regardless whether Sally is otherwise eligible for the
American opportunity credit in 2012, the American opportunity
credit cannot be claimed for Sally in 2012.
3. For at least one academic period beginning (or treated as
beginning) in 2012, the student both:
a. Was enrolled in a program that leads to a degree,
certificate, or other recognized educational credential; and
b. Carried at least one-half the normal full-time workload for
his or her course of study.
The standard for what is half of the normal full-time work load
is determined by each eligible educational institution. However,
the standard may not be lower than any of those established by
the U.S. Department of Education under the Higher Education
Act of 1965.
For purposes of whether the student satisfies this third
requirement for 2012, treat an academic period beginning in the
first three months of 2013 as if it began in 2012 if qualified
education expenses for the student were paid in 2012 for that
academic period. See Prepaid Expenses, later.
Example. Glenda enrolls on a full-time basis in a degree
program for the 2013 Spring semester, which begins in January
2013. Glenda pays her tuition for the 2013 Spring semester in
December 2012. Because the tuition Glenda paid in 2012
relates to an academic period that begins in the first 3 months of
2013, her eligibility to claim an American opportunity credit in
2012 is determined as if the 2013 Spring semester began in
2012. Therefore, Glenda satisfies this third requirement.
4. As of the end of 2012, the student had not been convicted
of a federal or state felony for possessing or distributing a
controlled substance.

Who cannot claim a credit. You cannot take an education
credit if any of the following apply.
1. You are claimed as a dependent on another person's tax
return, such as your parent's return.
2. Your filing status is married filing separately.
3. You (or your spouse) were a nonresident alien for any part
of 2012 and did not elect to be treated as a resident alien
for tax purposes.
4. Your modified adjusted gross income (MAGI) is:
a. For the American opportunity credit: $180,000 or more
if married filing jointly, or $90,000 or more if single,
head of household, or qualifying widow(er) with
dependent child.
b. For the lifetime learning credit: $124,000 or more if
married filing jointly, or $62,000 or more if single, head
of household, or qualifying widow(er) with dependent
child.
Generally, your MAGI is the amount on your Form 1040,
line 38, or Form 1040A, line 22. However, if you are filing Form
2555, Form 2555–EZ, or Form 4563, or are excluding income
from Puerto Rico, add to the amount on your Form 1040, line 38,
or Form 1040A, line 22, the amount of income you excluded. For
details, see Pub. 970.

American Opportunity Credit

If the requirements, above, are not met for any student,
you cannot take the American opportunity credit for that
student. You may be able to take the lifetime learning
credit for part or all of that student's qualified education
expenses instead.

You may be able to take a credit of up to $2,500 for adjusted
qualified education expenses (defined later) paid for each
student who qualifies for the American opportunity credit. This
credit equals 100% of the first $2,000 and 25% of the next
$2,000 of adjusted qualified expenses paid for each eligible
student. The amount of your credit for 2012 is gradually reduced
(phased out) if your MAGI is between $80,000 and $90,000
($160,000 and $180,000 if you file a joint return). You cannot
claim a credit if your MAGI is $90,000 or more ($180,000 or
more if you file a joint return).

TIP

Lifetime Learning Credit

The lifetime learning credit equals 20% of adjusted qualified
education expenses (defined later), up to a maximum of $10,000
of adjusted qualified education expenses per return. Therefore,
the maximum lifetime learning credit you can claim on your
return for the year is $2,000, regardless of the number of
students for whom you paid qualified education expenses. The
amount of your credit for 2012 is gradually reduced (phased out)
if your MAGI is between $52,000 and $62,000 ($104,000 and
$124,000 if you file a joint return). You cannot claim a credit if
your MAGI is $62,000 or more ($124,000 or more if you file a
joint return).

If you can claim the American opportunity credit for any
student, you can choose between using that student's
adjusted qualified education expenses for the American
opportunity credit or for the lifetime learning credit. If you have
this choice, the American opportunity credit will always be
greater than the lifetime learning credit.

TIP

Student qualifications. Generally, you can take the American
opportunity credit for a student only if all of the following four
requirements are met.
1. As of the beginning of 2012, the student had not
completed the first four years of postsecondary education
(generally, the freshman through senior years of college), as
determined by the eligible educational institution. For this
purpose, do not include academic credit awarded solely

You cannot claim the lifetime learning credit for any student if
you claim the American opportunity credit for that student for the
same tax year.

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Instructions for Form 8863 (2012)

Qualified Education Expenses

2013, you can use that $2,000 in figuring an education credit for
2012 only (if you meet all the other requirements).

Generally, qualified education expenses are amounts paid in
2012 for tuition and fees required for the student's enrollment or
attendance at an eligible educational institution. It does not
matter whether the expenses were paid in cash, by check, by
credit or debit card, or with borrowed funds.

!

CAUTION

Adjusted Qualified Education Expenses

For course-related books, supplies, and equipment only
certain expenses qualify.
American opportunity credit: Qualified education expenses
include amounts spent on books, supplies, and equipment
needed for a course of study, whether or not the materials are
purchased from the educational institution as a condition of
enrollment or attendance.
Lifetime learning credit: Qualified education expenses include
amounts for books, supplies, and equipment only if required to
be paid to the institution as a condition of enrollment or
attendance.

For each student, reduce the qualified education expenses paid
in 2012 by or on behalf of that student under the following rules.
The result is the amount of adjusted qualified education
expenses for each student.
Tax-free educational assistance. For tax-free educational
assistance received in 2012, reduce the qualified educational
expenses for each academic period by the amount of tax-free
educational assistance allocable to that academic period. See
Academic period, earlier.
Tax-free educational assistance includes:
1. The tax-free part of any scholarship or fellowship
(including Pell grants),
2. The tax-free part of any employer-provided educational
assistance,
3. Veterans' educational assistance, and
4. Any other educational assistance that is excludable from
gross income (tax free), other than as a gift, bequest, devise, or
inheritance.

Qualified education expenses include nonacademic fees,
such as student activity fees, athletic fees, or other expenses
unrelated to the academic course of instruction, only if the fee
must be paid to the institution as a condition of enrollment or
attendance. However, fees for personal expenses (described
below) are never qualified education expenses.
Qualified education expenses do not include amounts paid
for:
Personal expenses. This means room and board, insurance,
medical expenses (including student health fees), transportation,
and other similar personal, living, or family expenses.
Any course or other education involving sports, games, or
hobbies, or any noncredit course, unless such course or other
education is part of the student's degree program or (for the
lifetime learning credit only) helps the student acquire or improve
job skills.

Generally, any scholarship or fellowship is treated as tax-free
educational assistance. However, a scholarship or fellowship is
not treated as tax-free educational assistance to the extent the
student includes it in gross income (if the student is required to
file a tax return) for the year the scholarship or fellowship is
received and either:
The scholarship or fellowship (or any part of it) must be
applied (by its terms) to expenses (such as room and board)
other than qualified education expenses as defined in Qualified
education expenses in Pub. 970, chapter 1; or
The scholarship or fellowship (or any part of it) may be
applied (by its terms) to expenses (such as room and board)
other than qualified education expenses as defined in Qualified
education expenses in Pub. 970, chapter 1.

You should receive Form 1098-T, Tuition Statement, from the
institution reporting either payments received in 2012 (box 1) or
amounts billed in 2012 (box 2). However, the amount in box 1 or
2 of Form 1098-T may be different from the amount you paid (or
are treated as having paid). In completing Form 8863, use only
the amounts you actually paid (plus any amounts you are treated
as having paid) in 2012 (reduced, as necessary, as described in
Adjusted Qualified Education Expenses, later). See chapters 2
and 3 of Pub. 970 for more information on Form 1098-T.

You may be able to increase the combined value of an
education credit and certain educational assistance if
the student includes some or all of the educational
assistance in income in the year it is received. For details, see
Adjustments to Qualified Education Expenses, in chapters 2 and
3 of Pub. 970.

TIP

Qualified education expenses paid on behalf of the student
by someone other than the student (such as a relative) are
treated as paid by the student. Qualified education expenses
paid (or treated as paid) by a student who is claimed as a
dependent on your tax return are treated as paid by you.

Some tax-free educational assistance received after 2012
may be treated as a refund of qualified education expenses paid
in 2012. This tax-free educational assistance is any tax-free
educational assistance received by you or anyone else after
2012 for qualified education expenses paid on behalf of a
student in 2012 (or attributable to enrollment at an eligible
educational institution during 2012).

If you or the student takes a deduction for higher education
expenses, such as on Schedule A or Schedule C (Form 1040),
you cannot use those same expenses in your qualified education
expenses when figuring your education credits.
Any qualified expenses used to figure the education
credits cannot be taken into account in determining the
CAUTION
amount of a distribution from a Coverdell ESA or a
qualified tuition program (section 529 plan) that is excluded from
gross income. See Pub. 970, chapters 6 and 7, for more
information.

!

If this tax-free educational assistance is received after 2012
but before you file your 2012 income tax return, see Refunds
received after 2012 but before your income tax return is filed,
later. If this tax-free educational assistance is received after
2012 and after you file your 2012 income tax return, see Refunds
received after 2012 and after your income tax return is filed,
later.

Prepaid Expenses

Qualified education expenses paid in 2012 for an academic
period that begins in the first 3 months of 2013 can be used in
figuring an education credit for 2012 only. See Academic period,
earlier. For example, if you pay $2,000 in December 2012 for
qualified tuition for the 2013 winter quarter that begins in January
Instructions for Form 8863 (2012)

You cannot use any amount you paid in 2011 or 2013 to
figure the qualified education expenses you use to
figure your 2012 education credit(s).

Refunds. A refund of qualified education expenses may reduce
qualified education expenses for the tax year or may require you
to repay (recapture) the credit that you claimed in an earlier year.
Some tax-free educational assistance received after 2012 may
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be treated as a refund. See Tax-free educational assistance,
earlier.
Refunds received in 2012. For each student, figure the
adjusted qualified education expenses for 2012 by adding all the
qualified education expenses paid in 2012 and subtracting any
refunds of those expenses received from the eligible educational
institution during 2012.
Refunds received after 2012 but before your income tax
return is filed. If anyone receives a refund after 2012 of
qualified education expenses paid on behalf of a student in 2012
and the refund is received before you file your 2012 income tax
return, reduce the amount of qualified education expenses for
2012 by the amount of the refund.
Refunds received after 2012 and after your income tax
return is filed. If anyone receives a refund after 2012 of
qualified education expenses paid on behalf of a student in 2012
and the refund is received after you file your 2012 income tax
return, you may need to repay some or all of the credit that you
claimed. See Credit recapture, next.

Specific Instructions

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CAUTION

You must complete a separate Part III on page 2
for each individual for whom you are claiming
either credit before you complete Parts I and II.

Part I — Refundable American
Opportunity Credit
Line 1

Enter the amount from Part III, line 30. If you are claiming the
American opportunity credit for more than one student, add the
amounts from each student's Part III, line 30, and enter the total
for those students on line 1.

Line 3

Enter your modified adjusted gross income. Generally, your
modified adjusted gross income is the amount on your Form
1040, line 38, or Form 1040A, line 22. However, if you are filing
Form 2555, Form 2555–EZ, or Form 4563, or are excluding
income from Puerto Rico, you must include on line 3 the amount
of income you excluded. For details, see Pub. 970.

Credit recapture. If any tax-free educational assistance for the
qualified education expenses paid in 2012, or any refund of your
qualified education expenses paid in 2012, is received after you
file your 2012 income tax return, you must recapture (repay) any
excess credit. You do this by refiguring the amount of your
adjusted qualified education expenses for 2012 by reducing the
expenses by the amount of the refund or tax-free educational
assistance. You then refigure your education credit(s) for 2012
and figure the amount by which your 2012 tax liability would
have increased if you had claimed the refigured credit(s).
Include that amount as an additional tax for the year the refund
or tax-free assistance was received.

Line 7

If you were under age 24 at the end of 2012 and the conditions
listed below apply to you, you cannot claim any part of the
American opportunity credit as a refundable credit on your tax
return. Instead, you can claim your allowed credit, figured in Part
II, only as a nonrefundable credit to reduce your tax.

Example. You paid $8,000 tuition and fees in December
2012 for your child's Spring semester beginning in January
2013. You filed your 2012 tax return on February 2, 2013, and
claimed a lifetime learning credit of $1,600 ($8,000 qualified
education expense paid x .20). You claimed no other tax credits.
After you filed your return, your child withdrew from two courses
and you received a refund of $1,400. You must refigure your
2012 lifetime learning credit using $6,600 ($8,000 qualified
education expenses − $1,400 refund). The refigured credit is
$1,320 and your tax liability increased by $280. You must
include the difference of $280 ($1,600 credit originally claimed −
$1,320 refigured credit) as additional tax on your 2013 income
tax return. See the instructions for your 2013 income tax return
to determine where to include this tax.

You do not qualify for a refundable American opportunity
credit if 1 (a, b, or c), 2, and 3 below apply to you.
1. You were:
a. Under age 18 at the end of 2012, or
b. Age 18 at the end of 2012 and your earned income
(defined later) was less than one-half of your support
(defined later), or
c. Over age 18 and under age 24 at the end of 2012 and a
full-time student (defined later) and your earned income
(defined later) was less than one-half of your support
(defined later).
2. At least one of your parents was alive at the end of 2012.
3. You are not filing a joint return for 2012.

If you also pay qualified education expenses in 2013 for
an academic period that begins in the first 3 months of
2013 and you receive tax-free educational assistance,
or a refund, as described above, you may choose to reduce your
qualified education expenses for 2013 instead of reducing your
expenses for 2012.

TIP

If you meet these conditions, check the box next to line 7,
skip line 8, and enter the amount from line 7 on line 9. If these
conditions do not apply to you, complete line 8.

Eligible Educational Institution

You can answer the following questions to determine whether
you qualify for a refundable American opportunity credit.
1. Were you under 24 at the end of 2012?
If no, stop here; you do qualify to claim part of the allowable
American opportunity credit as a refundable credit.
If yes, go to question 2.
2. Were you over 18 at the end of 2012?
If yes, go to question 3.
If no, go to question 4.
3. Were you a full-time student (defined later) for 2012?
If no, stop here; you do qualify to claim part of your allowable
American opportunity credit as a refundable credit.
If yes, go to question 5.
4. Were you 18 at the end of 2012?

An eligible educational institution is generally any accredited
public, nonprofit, or proprietary (private) college, university,
vocational school, or other postsecondary institution. Also, the
institution must be eligible to participate in a student aid program
administered by the Department of Education. Virtually all
accredited postsecondary institutions meet this definition.

Additional Information

See Pub. 970, chapters 2 and 3, for more information about
these credits.

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Instructions for Form 8863 (2012)

amounts from each student's Part III, line 31, and enter the total
for all those students on line 1.

If yes, go to question 5.
If no, go to question 6.
5. Was your earned income (defined later) less
than one-half of your support (defined later) for 2012?
If no, stop here; you do qualify to claim part of your allowable
American opportunity credit as a refundable credit.
If yes, go to question 6.
6. Were either of your parents alive at the end of 2012?
If no, stop here; you do qualify to claim part of your allowable
American opportunity credit as a refundable credit.
If yes, go to question 7.
7. Are you filing a joint return for 2012?
If no, you do not qualify to claim part of your allowable
American opportunity credit as a refundable credit.
If yes, you do qualify to claim part of your allowable
American opportunity credit as a refundable credit.

Line 14

Generally, your modified adjusted gross income is the amount
on your Form 1040, line 38, or Form 1040A, line 22. However, if
you are filing Form 2555, Form 2555–EZ, or Form 4563, or are
excluding income from Puerto Rico, you must include on line 3
the amount of income you excluded. For details, see Pub. 970.

Line 18

Enter the amount from line 18 on line 1 of the Credit Limit
Worksheet, later.

Line 19

Enter the amount from line 13 of the Credit Limit Worksheet here
and on Form 1040, line 49, or Form 1040A, line 31.

Earned income. Earned income includes wages, salaries,
professional fees, and other payments received for personal
services actually performed. Earned income includes the part of
any scholarship or fellowship that represents payment for
teaching, research, or other services performed by the student
that are required as a condition for receiving the scholarship or
fellowship. Earned income does not include that part of the
compensation for personal services rendered to a corporation
which represents a distribution of earnings or profits rather than
a reasonable allowance as compensation for the personal
services actually rendered.
If you are a sole proprietor or a partner in a trade or business
in which both personal services and capital are material
income-producing factors, earned income also includes a
reasonable allowance for compensation for personal services,
but not more than 30% of your share of the net profits from that
trade or business (after subtracting the deduction for one-half of
self-employment tax). However, if capital is not an
income-producing factor and your personal services produced
the business income, the 30% limit does not apply.

Credit Limit Worksheet
Complete the credit limit worksheet to figure your
nonrefundable education credit.
1. Enter the amount from Form 8863, line 18 . .
1.
2. Lines 2–7 are reserved for future use
8. Enter the amount from Form 8863, line 9
9. Add lines 1 and 8

8.

. . . . . . . . . . . . . . . . . .

9.

10. Enter the amount from:
Form 1040, line 46; or
Form 1040A, line 28 . .

. . . . . . . . . . . . . .

11. Enter the amount from either:
Form 1040, lines 47 and 48,
and the amount from Schedule R
included on Form 1040, line 53; or
Form 1040A, lines 29 and 30 . . .

10.

. . . . . . .

11.

. . . . . . . . . . .

12.

13. Enter the smaller of line 9 or line 12 here and
on Form 8863, line 19 . . . . . . . . . . . . . . .

13.

12. Subtract line 11 from line 10

Support. Your support includes food, shelter, clothing, medical
and dental care, education and the like. Generally, the amount of
an item of support will be the amount of expenses incurred by
the one furnishing such item. If the item of support is in the form
of property or lodging, measure the amount of such item of
support by its fair market value. To figure your support, count
support provided by you, your parents, and others. However, a
scholarship received by you is not considered support if you
were a full-time student (defined below) for 2012.

You must complete Part III for each student for whom
you are claiming either the American opportunity credit
CAUTION
or lifetime learning credit before you complete either
Part I or Part II. Use additional copies of Page 2 as needed for
each student.

!

Part III — Student and Educational
Institution Information

Full-time student. Solely for purposes of determining whether
a scholarship is considered support, you were a full-time student
for 2012 if during any part of any 5 calendar months during the
year you were enrolled as a full-time student at an eligible
educational institution (defined earlier), or took a full-time,
on-farm training course given by such an institution or by a state,
county, or local government agency.

Line 20

Enter the student's name as shown on page 1 of your tax return.

Line 21

Part II — Nonrefundable Education
Credits

Enter the student's taxpayer identification number as shown on
page 1 of your tax return.

Line 22

Line 9

If the student attended only one educational institution, enter the
information about the institution and answer the questions about
Form 1098-T in column (a). If the student attended a second
educational institution, enter the information and answers for the
second educational institution in column (b). If the student
attended more than 2 educational institutions, attach an
additional page 2 completed only through line 22.

Enter the amount from line 9 on line 8 of the Credit Limit
Worksheet, later.

Line 10

Enter the amount from Part III, line 31. If you are claiming the
lifetime learning credit for more than one student, add the

Instructions for Form 8863 (2012)

. .

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Line 23

not enter more than $4,000. Enter the total of all amounts from
all Parts III, line 30, on Part I, line 1.

If the American opportunity credit has been claimed for this
student for 4 prior tax years (including any year for which the
Hope scholarship credit was claimed for the student), the
American opportunity credit cannot be claimed for this student
for 2012. Check “Yes” and go to line 31.

Lifetime Learning Credit
Line 31

Enter the student's adjusted qualified education expenses for
line 31. See Qualified Education Expenses, earlier. Use the
Adjusted Qualified Education Expenses Worksheet, next, to
figure each student's adjusted qualified education expenses.
Enter the total of all amounts from Part III, line 31, on Part II,
line 10.

If the American opportunity and Hope scholarship credits
have been claimed for this student for 3 or fewer prior tax years,
check “No.” See Student qualifications, earlier.

Line 24

Check “Yes” if the student enrolled at least half-time for at least
one academic period that began (or is treated as having begun)
in 2012 at an eligible educational institution in a program leading
towards a postsecondary degree, certificate, or other recognized
postsecondary educational credential. Otherwise, check “No.”

Adjusted Qualified Education Expenses
Worksheet
See Qualified Education Expenses, earlier, before
completing.

If any qualified education expenses for the student were paid
in 2012 for an academic period beginning in the first 3 months of
2013, treat that academic period as if it began in 2012. See
Student qualifications and Prepaid Expenses, earlier.

Complete a separate worksheet for each student for each
academic period beginning (or treated as beginning) in 2012 for
which you paid (or are treated as having paid) qualified
education expenses in 2012.

If you checked “Yes” go to line 25. If you checked “No” the
student is not eligible for the American opportunity credit, skip
lines 25 through 30 and go to line 31.

1. Total qualified education expenses paid for or
on behalf of the student in 2012 for the
academic period . . . . . . . . . . . . . . . . . .

Line 25

Check “Yes” if the student completed the first 4 years of
postsecondary education before 2012. Otherwise, check “No.”

2. Less adjustments:
a. Tax-free educational
assistance received in 2012
allocable to the academic
period . . . . . . . . . . . .
b. Tax-free educational
assistance received in 2013
(and before you file your
2012 tax return) allocable to
the academic period . . .
c. Refunds of qualified
education expenses paid in
2012 if the refund is
received in 2012 or in 2013
before you file your 2012
tax return . . . . . . . . . .

If you checked “No,” go to line 26. If you checked “Yes,” the
student is not eligible for the American opportunity credit; skip
lines 26 through 30 and go to line 31.

Line 26

Check “Yes” if the student was convicted, before the end of
2012, of a federal or state felony for possession or distribution of
a controlled substance.
If you checked “No,” complete either lines 27 through 30 or
line 31 for this student. If you checked “Yes,” the student is not
eligible for the American opportunity credit; skip lines 26 through
30 and go to line 31.
You cannot take the American opportunity credit and
the lifetime learning credit for the same student in the
same year. If you complete lines 27 through 30 for this
student, do not complete line 31.

TIP

American Opportunity Credit
Line 27

Enter the student's adjusted qualified education expenses for
line 27. See Qualified Education Expenses, earlier. Use the
Adjusted Qualified Education Expenses Worksheet, later, to
figure each student's adjusted qualified education expenses. Do

3. Total adjustments (add lines 2a, 2b, and
2c) . . . . . . . . . . . . . . . . . . . . . . . . .

. . .

4. Adjusted qualified education expenses.
Subtract line 3 from line 1. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . .

. . .

!

CAUTION

and II.

-6-

If you are claiming an education credit for more than
one student, complete a separate Part III for each
student before returning to page 1 to complete Parts I

Instructions for Form 8863 (2012)