c Prepare Form 8863 for Jean in Part b Robert did not receiv

c. Prepare Form 8863 for Jean in Part b. Robert did not receive a Form 1098-T from the University of Georgia, nor has he been convicted of a felony. 10. Education Tax Credit. (Obi. 2) Curt and Kathy Norton paid $3,200 of tuition for their son, who attends college less than half-time. Of this amount, $1,500 was paid on December 28, 2015, for the Spring 2016 semester, and $1,700 was paid on August 4, 2016, for the Fall 2016 semester. Compute the Nortons\' 2016 education tax credit if their AGI is $71,900. How much a. of their credit is refundable versus nonrefundable? b. Same as in Part a, except that the Nortons\' AGI is $119,816. 11. Education Tax Credit. (Obj. 2) In 2016, Paul and Karen Mitchell pay $12,000 for their daughter\'s tuition for the Spring and Fall semesters. Their daughter is a full-time graduate student. The Mitchells also paid $3,800 for their son\'s tuition for the Spring and Fall semesters In the Fall of 2016, their son, Ron began his sophomore year of college. The son atten college full-time. ds a. Compute the Mitchells 2016 education tax credit if their of their credit is refundable versus nonrefundal AGI is $121,600. How muc

Solution

10) a. Money paid in december 2015 for tuition for a student who is enrolled atleast half time for atleast one academic period that begins during 2016 qualifies for American Oppurtunity tax credit. In this case, the academic period begins in 2016 and hence eligible for credit in 2016.

Maximum AOTC credit is $2500 per student (100% of 1st $2500 of tuition fees & 25% of next $2000, for a maximum of 2 children. Further, it is allowed only if the AGI is upto $80000 for single & head of the family ($160000 if married and filing jointly). Credit is partially allowed if AGI exceeds 80000 but not exceeding 90000. If exceeds 90000, then no credit is allowed.

Let us analyse in this instant case:

AGI is $71900 (within limit)

Tuition fees paid : $3200

eleigible credit = (100% * 2000) + (25% * 1200) = 2000+300=$2300

40% of eligible credit is refundable (which is $920) and balance $1380 is non refundable.

b. If Norton’s AGI is $119816, which is in excess of the throshold limit of $90000, education credit is not available.