What This Notice Means

This is potentially good news. IRS records show you may be eligible to claim the American Opportunity Tax Credit (AOTC), the Lifetime Learning Credit (LLC), or both for tax year 2023, for one or more eligible students listed on your return. You didn't claim it. The IRS is telling you it may be there.

You don't owe anything because of this notice.

Check Eligibility

For the AOTC, the student must at least:

  • Be pursuing a degree or other recognized credential at an eligible post-secondary school.
  • Be enrolled at least half-time for at least one academic period beginning in the tax year.
  • Not have finished the first 4 years of higher education at the start of the tax year.
  • Not have claimed the AOTC or the former Hope Credit for more than 4 tax years.
  • Not have a felony drug conviction at the end of the tax year.

For the LLC, the student must at least be enrolled for at least one academic period beginning in the tax year, at an eligible school, taking courses as part of a degree program or to get or improve job skills.

Additional requirements may apply to both. The IRS Interactive Tax Assistant can help you check.

What to Do If You Qualify

  • File Form 1040-X, Amended U.S. Individual Income Tax Return.
  • Complete and include Form 8863, Education Credits.
  • If you claim the AOTC, include the school's Employer Identification Number on Form 8863. The law requires it.
  • You may also need to amend your state or local return.

AOTC vs. LLC

The AOTC can cover course-related books, supplies, and equipment needed for attendance even if not paid to the school. It's limited to 4 tax years. The LLC has no limit on the number of years.

If You Don't Qualify

Do nothing. There's no penalty for not claiming a credit you aren't entitled to.

Next Time

If you, your spouse, or a dependent qualifies in a future year, file Form 8863 with your Form 1040.

If you have a bigger IRS issue than a missed credit, call us at (813) 229-7100.