1098-T Education Credit Calculator
Enter your modified AGI, your tax before credits and the tuition from your 1098-T to see how much the American opportunity and lifetime learning credits add to your 2026 refund (the return you file in 2027).
Phase-out: $80,000–$90,000 MAGI.
For most filers, Form 1040 line 11.
Form 1040 line 18. The refund calculator can estimate it.
First 4 years of college, at least half-time.
Tuition, fees and required course materials you paid in 2026.
All other students combined (grad school, single courses).
Added to your refund
$2,500.00
American opportunity
$2,500.00
$1,000.00 refundable
Lifetime learning
$0.00
Nonrefundable
Phase-out ratio
1.000
1.000 = full credit
| American opportunity credit before phase-out | $2,500.00 |
| Lifetime learning credit before phase-out | $0.00 |
| Refundable part (40% of the AOTC, paid even with no tax) | $1,000.00 |
| Nonrefundable part used against your tax | $1,500.00 |
| Nonrefundable part lost (tax too low to use it) | $0.00 |
How it's calculated
This follows Form 8863 line by line:
- American opportunity credit: 100% of the first $2,000 of expenses plus 25% of the next $2,000, per student.
- Lifetime learning credit: 20% of up to $10,000 of expenses, per return.
- Both are multiplied by the phase-out ratio, (limit − MAGI) ÷ range, capped at 1 and rounded to three decimals. The limit is $90,000 ($180,000 joint) and the range is $10,000 ($20,000 joint).
- 40% of the American opportunity credit is refundable. The rest, plus the lifetime learning credit, can only cancel tax you owe.
Worked example
The calculator's defaults: a single filer with $60,000 MAGI and $5,020 of tax, paying $4,000 of tuition for one first-year student.
| American opportunity credit ($2,000 + 25% × $2,000) | $2,500.00 |
| Refundable part (40%) | $1,000.00 |
| Nonrefundable part used against tax | $1,500.00 |
| Added to the refund | $2,500.00 |
Don't know your tax before credits? The tax refund calculator shows it as “Tax before credits”. The site's test suite checks these numbers against a hand calculation.
Source
IRS Instructions for Form 8863 (2026 draft), checked 2026-10-24. The final 2026 instructions may still change before release.
Frequently Asked Questions
Does a 1098-T increase my tax refund?
It can. The 1098-T itself isn't a refund; it shows the tuition you paid, which you use to claim an education credit on Form 8863. The American opportunity credit is worth up to $2,500 per student, and 40% of it (up to $1,000) is paid to you even if you owe no tax. The lifetime learning credit is worth up to $2,000 per return but only reduces tax you owe.
Should I use the amount in box 1 of my 1098-T?
Use what you actually paid in 2026 for qualified expenses, minus tax-free scholarships and grants. Box 1 shows payments the school received, which can differ from what you paid. Required books and course materials count for the American opportunity credit even if you bought them somewhere else.
What's the difference between the American opportunity and lifetime learning credits?
The American opportunity credit is for the first 4 years of college, at least half-time, toward a degree, and is partly refundable. The lifetime learning credit covers any year of college, graduate school or job-skills courses, has no half-time rule, and is nonrefundable. You can't take both for the same student in the same year.
What are the 2026 income limits for education credits?
Both credits phase out between $80,000 and $90,000 of modified AGI for single, head of household and qualifying surviving spouse filers, and between $160,000 and $180,000 for married filing jointly. Married filing separately can't claim either. These limits are set in law and aren't adjusted for inflation. Source: IRS Instructions for Form 8863 (2026 draft).
What changed for 2026?
Starting with 2026 returns, you (or one spouse on a joint return) need a valid Social Security number issued by the return's due date to claim either credit, and so does a dependent student. An ITIN no longer qualifies. This comes from the One Big Beautiful Bill Act and is listed in the IRS's 2026 Form 8863 instructions.
Why is my refundable part zero?
If the student claiming the credit is under 24 and their earned income is less than half their support (the Form 8863 line 7 conditions), none of the American opportunity credit is refundable. Students who are claimed as a dependent can't claim it at all; their parent claims it instead.
This is an estimate from the inputs you enter and the published rates above, not tax advice, and this site is not affiliated with the IRS, any state revenue department, or the Social Security Administration. Real tax bills involve credits, deductions and filing details this tool can't model -- see the Terms.