What This Notice Means

You claimed the American Opportunity Tax Credit (AOTC) on Form 8863, Education Credits, with your Form 1040. IRS records show the credit was already claimed for four tax years for the same student. The AOTC is available for only four tax years per student. The notice tells you about the discrepancy so you can check your claim.

Note on the tax year: some CP03 notices dated November 26 referenced tax year 2025 by mistake. Those notices were meant for tax year 2024. If yours is one of them, use your 2024 Form 1040 when you follow the instructions.

What to Do

  • Review Form 8863, Part I, on your return to see whether the AOTC was claimed correctly.
  • If you claimed it in error, file an amended return. If you filed electronically, you can amend electronically.
  • Don't claim the AOTC for this student on future returns.
  • Share the notice with anyone who prepares your returns.
  • If you amend your federal return, you may also need to amend your state or local return.

Ignoring incorrect information could lead to more IRS correspondence.

Tax Years, Not School Years

This trips people up. The four-year limit counts tax years, not academic years. A student whose school year spans two calendar years can use up the credit faster than expected. Check how the school reported tuition on Form 1098-T for each year.

An eligible student must also be pursuing a degree or other recognized credential, be enrolled at least half time for at least one academic period beginning in the tax year, not have finished the first four years of higher education at the start of the tax year, and not have a felony drug conviction at the end of the tax year.

Other Education Credit

If the student no longer qualifies for the AOTC, the Lifetime Learning Credit may apply. There's no limit on the number of years you can claim it. It's worth up to $2,000 per tax return.

If you received a CP03 notice and the IRS is questioning your education credit, call us at (813) 229-7100.