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Federal input screens

Screen Educate - Education Payments, Adjustments, Credits (1040)

Overview

Use this screen to enter information regarding eligible education payments, adjustments, and credits.
Source data entry
The UltraTax CS Source Data Entry utility enables you to enter data on facsimile versions of forms your clients submit for the preparation of their tax returns. Once the facsimile forms are completed, you can export the data to UltraTax CS and transfer it into your client data files via the data sharing feature. For more information including a list of available facsimiles, see UltraTax CS Source Data Entry overview.

Form 8815 - Exclusion of Interest from Series EE and I Bonds

Use this section to enter information regarding interest income from Series EE and I U.S. savings bonds issued after 1989 and cashed in
2024
 for taxpayers with qualified education expenses.
Use the statement provided to enter enrollee and institution information; do not enter amounts directly in the input screen. If you do not use the statement, Form 8815 is incomplete. The information that follows describes the fields that appear in the attached statement.
  • Enrollee SSN:
     From the fieldview, select the social security number of the person who was enrolled at, or attended, an eligible educational institution during
    2024
    .
  • First Name / Last Name:
     UltraTax CS automatically enters the first and last names of the eligible student based on the selected Social Security number.
  • Educational Institution, Address, City, State, Zip:
     Enter the name and address of the eligible educational institution that the enrollee attended.
  • Qualified Expenses:
     Enter the total amount paid in
    2024
     for qualified higher education expenses. Do not include expenses that were covered by nontaxable education benefits paid directly to or by the educational institution. Also, do not include expenses used to calculate an education credit or the nontaxable amount of a distribution from a Coverdell ESA or QTP.
  • Nontaxable Benefits:
     Enter the total of any nontaxable educational benefits received for
    2024
    .
  • Qual Educ Prog Type:
     Enter
    ESA
     if the taxpayer contributed to a Coverdell ESA for the enrollee. Or, enter the
    QTP
     if the taxpayer contributed to a Qualified Tuition Plan (QTP) for the enrollee.
  • Financial Institution/Program Name, Address, City, State, Zip Code:
     Enter the name and address of the financial institution where the Coverdell ESA account is located, or for contributions to a QTP, enter the name and address of the program. This field contains a linked custom fieldview, which enables you to automatically enter data in the related
    Name
    ,
    Address
    ,
    City
    ,
    State
    , and
    Zip Code
     fields. Select the down arrow and choose
    Edit Multi-field Custom Fieldview
     to open the Custom Fieldview dialog, in which you can enter, edit, or select a fieldview item for these linked fields. See What is a custom fieldview? for more information about linked custom fieldviews.
Enter total principal and interest proceeds from all Series EE and I U.S. savings bonds issued after 1989 and cashed in
2024
.
Amounts entered in this field transfer to Form 8815. The amount in this force field overrides any code
7
 Series EE and I bonds eligible for Form 8815 interest amounts entered in the statement attached to the
Interest income
 field in the Schedule B - Interest and Dividend Income section in the B&D screen.

Student Loan Interest Deduction

Use this section to enter information needed to complete the Student Loan Interest Deduction Worksheet. The student interest deduction calculated on the worksheet automatically transfers to Page 1 of the return.
Enter the amount of interest paid during
2024
 on a qualified education loan in the
Qualified education loan interest paid in
2024
 field, or in the attached statement. The statement includes the following fields.
  • Recipient/Lender:
     Enter the name of the lender.
  • Interest Received by lender (Box 1):
     Enter the amount to be treated as qualified education loan interest paid in
    2024
     and reported on the Student Loan Interest Deduction Worksheet.
  • Loan Origination Fees (Box 2):
     This field contains data shared from the Source Data Entry Utility and is not required when manually entering data in the statement. Data in this field does not change the amount entered in the
    Interest Received by lender (Box 1)
     field, which is treated as qualified education loan interest paid in
    2024
     and reported on the Student Loan Interest Deduction Worksheet.
    Only loan origination fees for the use of money are deductible. If the loan origination fees are for other property or services (for example, commitment or processing fees) they are not deductible. Use the
    Deductible Amount If Different from Box 1
     field if the Box 1 amount contains nondeductible loan origination fees. A diagnostic indicates when data exists in this field.
  • Deductible Amount If Different from Box 1:
     Enter the deductible amount of student loan interest only when it is different than the amount entered in the
    Interest Received by lender (Box 1)
     field. Zero (
    0
    ) may be entered in this field if applicable. To determine the deductible portion, refer to IRS Publication 970, Tax Benefits for Education.
  • State:
     Enter the state postal code in this field.
  • State use code:
     For Massachusetts, student loan interest is a deduction on Schedule Y.
    1
     = Undergraduate [MA],
    2
     = Graduate [MA],
    3
    =Exclude[MA]. If this field is left blank, Massachusetts treats student loan interest as Undergraduate interest.
  • Do Not Proforma:
     Enter
    X
     in this field to delete the item on next year's proforma.
The maximum student loan interest deduction for the current tax year is $2,500. A qualified loan must be for the taxpayer, spouse, or taxpayer's dependent at the time of the loan. A taxpayer who is the dependent of another, or married individuals not filing jointly, are not allowed to take the deduction. Enter the amount paid separately by the taxpayer or spouse for any qualified individual. Do not use the qualified education loan interest entered here as a deduction under another section of the Internal Revenue Code.
The UltraTax CS Source Data Entry utility shares data to the following fields in this statement:
TS
,
Description
,
Interest Received by Lender (Box 1)
, and
Loan Origination Fees (Box 2)
.
Enter the amount of the adjustment to the calculated modified adjusted gross income. A negative entry is treated as a subtraction.
Enter
X
 in this field if the taxpayer is a dependent of another and is claiming the student loan interest deduction. If the
Dependent of another
 field in the 1040 screen contains data for either the taxpayer or the spouse in the 1040 screen, you must enter
X
 in this field to calculate the Student Loan Interest Deduction Worksheet. Refer to IRS Publication 970 for information on who can claim a dependent's student loan interest.

Education Credits

Use this section to enter eligible student information for the American Opportunity Credit and the Lifetime Learning Credit.
The number of columns in the Eligible student information statement on the Educate screen now matches the fields from the Form 1098-T, Tuition Statement, (or an acceptable substitute) that is issued by an educational institution to each enrolled student. The IRS redesigned Form 8863, Education Credits, in reaction to an internal government audit, which requires more information reporting to deter fraud for refundable credits.
Enter the amounts for books and fees that meet the requirements for qualified education expenses as follows:
  • Enter expenses paid directly to the institution in the
    Pymt Rec'd Qual Tuition
     column
  • Enter expenses not paid directly to the institution in the
    Non-institution expenses
     column
Use the attached statement for the tuition and fees deduction and education credits. The information that follows describes the fields that appear in the statement.
  • Ed Exp Code:
     Select
    1
     from the fieldview to indicate the American Opportunity Credit,
    2
     to indicate the Lifetime Learning Credit.
  • Student's Social Security Number:
     Select the student's Social Security number from the fieldview.
  • First Name / Last Name:
     UltraTax CS automatically enters the first and last names of the eligible student based on the chosen Social Security number.
  • Pymt Rec'd Qual Tuition:
     Using information from Form 1098-T, box 1, enter the qualified higher education expenses for the year. If the amount from any Form 1098-T differs from the amount actually paid, enter the amount paid. UltraTax CS uses the amount in this column in the calculation of Form 8863, line 27 or 31, as applicable. Do not include expenses used to calculate the nontaxable amount of a distribution from a Coverdell ESA or QTP or an education deduction elsewhere on the return.
  • Scholarships and Grants:
     Enter any Scholarships and Grants received and reported on Form 1098-T box 5. Amounts included in this field reduce the amount of qualified expenses entered in the
    Pymnt Rec'd Qual Tuition
     column which are used in calculating either the American Opportunity Tax Credit or the Lifetime Learning Credit for the education institution listed on this line. The amount in this column is included in the calculation of Form 8863, line 27 or 31 as applicable.
  • Non-qualified Expenses:
     Enter the amount of any scholarships and grants that were used to pay for nonqualified expenses that you are including as income as explained in Publication 970. Including this amount in taxable income may increase the education credit. The amount in this column is included in the calculation of Form 8863, line 27 or 31, as applicable. Do not include expenses used to calculate the nontaxable amount of a distribution from a Coverdell ESA or QTP or an education deduction elsewhere on the return.
  • Ins Contract Reimb:
     Enter any Insurance Contract Reimbursements received that were reported on Form 1098-T box 10. Amounts included in this field reduce the amount of qualified expenses entered in the
    Pymt Rec'd Qual Tuition
     column. The amount in this column is included in the calculation of Form 8863, line 27 or 31 as applicable.
  • Non-institution expenses:
     Enter the amount of qualified education expenses that were not paid
    directly
     to the education institution. The amount in this column is included in the calculation of Form 8863 line 27, if applicable. Do not include expenses used to calculate the nontaxable amount of a distribution from a Coverdell ESA or QTP or an education deduction elsewhere on the return.
  • AOTC disqualifier:
     Select a code from the fieldview if the student is not eligible for the American Opportunity Credit. Select
    1
     for not pursuing degree; select
    2
     for not enrolled at least half-time; select
    3
     for felony drug conviction; select
    4
     for 4 yrs postsecondary educ before
    2024
    . By default, UltraTax CS assumes the eligible student is a full-time student.
  • PY Hope (AOTC) Credit:
     Select
    1
     from the fieldview if the American Opportunity (or Hope) Credit was claimed in one prior tax year,
    2
     if the American Opportunity (or Hope) Credit was claimed in two prior tax years,
    3
     if the American Opportunity (or Hope) Credit was claimed in three prior tax years, or
    4
     if the American Opportunity (or Hope) Credit was claimed in four prior tax years. Each student is only entitled to claim the American Opportunity Credit for four tax years, including any years the Hope Credit was claimed.
  • Graduate Student:
     For Kentucky, Massachusetts, and New York returns, a
    1
     in this field indicates the amount is graduate-level related and does not qualify for education credits or deductions.
  • 2024
     1098-T Received:
     Enter
    X
     in this column if the student received a Form 1098-T. UltraTax CS marks Yes on Form 8863, line 22a(2). If the student received a
    2024
     Form 1098-T, the institution's federal identification number is required.
  • [[ut_py_yyyy]] 1098-T Box 7 marked
    : Enter
    X
     in this column if the student received a Form 1098-T in
    2023
     with box 2 filled in and Box 7 checked. UltraTax CS marks Yes on Form 8863, line 22a(3). The institution's federal identification number is required if an X is entered in this column.
  • State:
     Select the applicable state postal code from the fieldview.
  • State Use:
     The codes that are available in this field are specific to the state postal code entered in the
    State
     field. If state use codes are not applicable to the entered state, state use codes will not be available.
    For Arkansas returns: Select
    1
     from the fieldview to indicate a two-year institution for Arkansas purposes; select
    2
     to indicate a four-year institution for Arkansas purposes; select
    3
     to indicate a technical institution for Arkansas.
    For District of Columbia returns: Select
    5
     to indicate an expenditure that is for a teacher in the District of Columbia.
    For Oregon returns: Select
    4
     from the field view to indicate that the amount of scholarship in excess of the tuition and fees charged was used for housing expenses and qualifies as a subtraction on the Oregan return.
  • Institution EIN:
     Enter the Employer Identification Number (EIN) of the educational institution where the education expenses were incurred. This field contains a linked custom fieldview, which enables you to automatically enter data in the related
    Name
    ,
    Address
    ,
    City
    ,
    State
    , and
    Zip Code
     fields. Click the down arrow and choose
    Edit Multi-field Custom Fieldview
     to open the Custom Fieldview dialog, in which you can enter, edit, or select a fieldview item for these linked fields. Press
    CTRL+S
     to save the field in the fieldview. See Custom fieldviews overview for more information about linked custom fieldviews.
  • Inst. Changed Method:
     This field will only have data if it is retrieved using the UltraTax CS Source Data Entry utility. If this field contains data, UltraTax CS issues a diagnostic stating that an amount was shared by the UltraTax CS Source Data Entry utility from Form 1098-T. This amount may affect the amount of any allowable tuition and fees deduction or education credit that you claimed for the prior year. Review the prior year return and consider filing an amended return if necessary.
  • Amts for
    2025
     Semester:
     If this field contains data from the UltraTax CS Source Data Entry utility, a diagnostic states that an amount was shared by the UltraTax CS Source Data Entry utility from Form 1098-T. An entry in this field will be used in the following year to determine whether an institution's federal identification number is required on Form 8863, line 22(4).
  • Adj for Prior Yr:
     This field will only have data if it is retrieved using the UltraTax CS Source Data Entry utility. If this field contains data, a diagnostic states that an amount was shared by the UltraTax CS Source Data Entry utility from Form 1098-T. This amount may affect the amount of any allowable tuition and fees deduction or education credit that you claimed for the prior year. Review the prior year return and consider filing an amended return if necessary.
  • Adj to Schol Prior Yr:
     This field will only have data if it is retrieved using the UltraTax CS Source Data Entry utility. If this field contains data, a diagnostic displays stating that an amount was shared by the Source Data Entry utility from Form 1098-T. This amount may affect the amount of any allowable tuition and fees deduction or education credit that you claimed for the prior year. Review the prior year return and make adjustments as necessary. See Publication 970 for additional guidance.
  • Do Not Proforma:
     Enter
    X
     in this field to delete the item on next year's proforma.
Use this field to make adjustments to modified adjusted gross income if necessary. UltraTax CS automatically includes the foreign earned income exclusion. A negative entry is treated as a subtraction.
Enter the amount of additional tax to be included in this year's return due to receipt of tax-free educational assistance or refunds of qualified expenses after educational credits have been claimed on a prior year's return. The tax on the recapture amount is the difference between the education credit claimed on the prior year return and the re-figured education credit calculated from qualified educational expenses as adjusted by expenses, which have been refunded, or assistance received.
The following table depicts the deductibility rules for qualified education expenses used in determining the American Opportunity or Lifetime Learning Credits:
American Opportunity Credit
Lifetime Learning Credit
Maximum credit
Up to $2,500 credit per
eligible student
Up to $2,000 credit per
return
Limit on modified adjusted gross income (MAGI)
$180,000 if married filing jointly; $90,000 if single, head of household, or qualifying widow(er)
$180,000 if married filing jointly; $90,000 if single, head of household, or qualifying widow(er)
Refundable or nonrefundable
40% of credit may be refundable; the rest is nonrefundable
Nonrefundable - credit limited to the amount of tax you must pay on your taxable income
Number of years of postsecondary education
Available
ONLY
 if the student had not completed the first 4 years of postsecondary education before
2024
Available for all years of postsecondary education and for courses to acquire or improve job skills
Number of tax years credit available
Available
ONLY
 for
4
 tax years per eligible student (including any year(s) Hope credit was claimed)
Available for an unlimited number of years
Type of program required
Student must be pursuing a degree or other recognized education credential
Student does not need to be pursuing a degree or other recognized education credential
Number of courses
Student must be enrolled at least half time for at least one academic period beginning during the year
Available for one or more courses
Felony drug conviction
As of the end of
2024
, the student had not been convicted of a felony for possessing or distributing a controlled substance
Felony drug convictions do not make the student ineligible
Qualified expenses
Tuition, required enrollment fees, and course materials that the student needs for a course of study whether or not the materials are bought at the educational institution as a condition of enrollment or attendance
Tuition and required enrollment fees (including amounts required to be paid to the institution for course-related books, supplies, and equipment)
Payments for academic periods
Payments made in
2024
 for academic periods beginning in
2024
 and in the first 3 months of
2025
Payments made in
2024
 for academic periods beginning in
2024
 and in the first 3 months of
2025
Enter
X
 in this field if the taxpayer is a dependent of another, but is eligible to claim an education credit for qualified education expenses paid during the tax year. Per IRS Publication 970, Tax Benefits for Education, if a taxpayer does not claim an exemption on his/her tax return for a dependent who is an eligible student (even if entitled to the exemption), then the dependent can claim the credit. For additional details about who can claim a dependent's expenses, refer to Publication 970.
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