Studying Abroad and Education credits

Technical topics regarding tax preparation.
#1
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Client's son studied abroad in 2017. If my memory does not fail me, certain educational institution in oversea are considered 'qualified institution' for education credits purpose. But how to confirm if an oversea educational institution is considered 'qualified' and is there a list to check?
 

#2
Taxaway  
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If the institution is eligible to participate in the Dept of Ed student aid programs, it fits the definition of qualified. You might find which ones on that govt website, I don't remember the last time I had to check.
 

#3
Nilodop  
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I studied a broad when I was much younger, but I don't think we had that credit back then.
 

#4
gmhksgp  
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This website may help but you also need to make sure a 1098-T would be issued, with limited exceptions, although I doubt they will: https://studentaid.ed.gov/sa/prepare-fo ... for-degree
 

#5
adamant  
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Was his study abroad through a college or other institution with roots here in the states? I see those more often than not.

I agree on the 1098-T, it would bring a level of comfort.
 

#6
Joan TB  
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Beginning in 2016, you have to have the Form 1098-T to get AOC.
 

#7
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I found a list by the IRS:

https://ifap.ed.gov/ifap/fedSchoolCodeList.jsp

And the school is actually on the list. However, the student said there is no Form 1098-T.

Has anyone ever seen a Form 1098-T issued by an university in oversea?

I am wondering how in the world he can get a school in France to issue a Form 1098-T.

In that case, does it mean no AOC on educational expenses of studying abroad at all even though the name of the school is on the list?
 

#8
gmhksgp  
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Technically, I suppose you can but that means you will take on a lot of responsibility and risk, especially given you are subject to due diligence for AOTC.

§25A(g)(8) stipulates that:
Except as otherwise provided by the Secretary, no credit shall be allowed under this section unless the taxpayer receives a statement furnished under section 6050S(d) which contains all of the information required by paragraph (2) thereof


Although §§1.6050S-1 does not provide any exception for foreign eligible institutions to not file a Form 1098-T, subsection (b)(2) permits institutions to:
use a substitute Form 1098-T if the substitute form complies with applicable revenue procedures relating to substitute forms (see § 601.601(d)(2) of this chapter).


Since the reporting requirements are quite onerous and specific, it is unlikely that the foreign university would understand the parameters sufficiently to issue an accurate and complete statement that could be used for US tax purpose assuming they agree to issue one (and that is a big IF), short of you auditing all the details and documents.
 

#9
skip  
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Have the student check his online account with the school. The 1098-T could possibly be something he could print.
 

#10
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gmhksgp wrote:Technically, I suppose you can but that means you will take on a lot of responsibility and risk, especially given you are subject to due diligence for AOTC.

§25A(g)(8) stipulates that:
Except as otherwise provided by the Secretary, no credit shall be allowed under this section unless the taxpayer receives a statement furnished under section 6050S(d) which contains all of the information required by paragraph (2) thereof


Although §§1.6050S-1 does not provide any exception for foreign eligible institutions to not file a Form 1098-T, subsection (b)(2) permits institutions to:
use a substitute Form 1098-T if the substitute form complies with applicable revenue procedures relating to substitute forms (see § 601.601(d)(2) of this chapter).


Since the reporting requirements are quite onerous and specific, it is unlikely that the foreign university would understand the parameters sufficiently to issue an accurate and complete statement that could be used for US tax purpose assuming they agree to issue one (and that is a big IF), short of you auditing all the details and documents.


The student studied in the US in the remaining part of the year so he has a Form 1098-T from his school in the US.

Is he allowed to claim AOC on the education expenses paid to the school in the US since he has the Form 1098-T. And then he claims tuition and fee deduction (Form 1040 line 34) on the education expenses paid to the oversea school? He does have a letter from the oversea school to certify the amount that he has paid to them as tuition (but no Form 1098-T) and I think the tuition and fee deduction does not strictly require a Form 1098-T like the AOC.
 

#11
gmhksgp  
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TaxItRight wrote:Is he allowed to claim AOC on the education expenses paid to the school in the US since he has the Form 1098-T. And then he claims tuition and fee deduction (Form 1040 line 34) on the education expenses paid to the oversea school? He does have a letter from the oversea school to certify the amount that he has paid to them as tuition (but no Form 1098-T) and I think the tuition and fee deduction does not strictly require a Form 1098-T like the AOC.


Is he allowed to claim AOC on the education expenses paid to the school in the US since he has the Form 1098-T. And then he claims tuition and fee deduction - No, you can't. See §222(c)(2).

I think the tuition and fee deduction does not strictly require a Form 1098-T like the AOC - That is not correct. See §222(d)(6)(A).
 

#12
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gmhksgp wrote:
TaxItRight wrote:Is he allowed to claim AOC on the education expenses paid to the school in the US since he has the Form 1098-T. And then he claims tuition and fee deduction (Form 1040 line 34) on the education expenses paid to the oversea school? He does have a letter from the oversea school to certify the amount that he has paid to them as tuition (but no Form 1098-T) and I think the tuition and fee deduction does not strictly require a Form 1098-T like the AOC.


Is he allowed to claim AOC on the education expenses paid to the school in the US since he has the Form 1098-T. And then he claims tuition and fee deduction - No, you can't. See §222(c)(2).

I think the tuition and fee deduction does not strictly require a Form 1098-T like the AOC - That is not correct. See §222(d)(6)(A).


OK, no deduction or credit at all then. Too bad.

They paid the tuition. The school is on the IRS eligible education institutions list. The expenses meet all the requirements of being qualified college education expenses. I just feel bad that they are not able to get any deduction or credit out of it just because the foreign school does not know what a Form 1098-T is or does not bother to issue one.
 

#13
gmhksgp  
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I didn't say they are not entitled to any education benefit. Suggest you read my post on Feb 20 again.
 


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