Tax season is now officially open, but people filing for college tax credits may have to wait a couple of additional weeks to file. The Internal Revenue Service said in a news release that those filing Form 8863, which applies to the Lifetime Learning Credit and the American Opportunity Tax Credit, will be unable to file until mid-February.
About the Credits
The first of these credits, the American Opportunity Tax Credit, is for individuals making less than $80,000 annually, or couples making less than $160,000. The AOTC provides a credit of as much as $2,500 a year for the first four years of college for expenses including books, fees, and tuition.
The second credit, the Lifetime Learning Credit provides up to a $2,000 credit for materials, fees, and tuition for students, spouses, and their dependents who are in college seeking a degree. There are many Americans who depend upon these credits to defray the costs of higher education.
Why the Delay?
This, like so many issues, is a result of the fiscal cliff. The measures taken by Congress early this year delayed the review process for the tax credit form. A spokesman for the IRS says that the heavy workload during the early part of the year didn’t allow for time to complete everything.
Those filing taxes can continue to pursue other education-related claims, such as tuition and fee deductions as well as interest on student loans. People filing for these credits and deductions can start immediately. The IRS estimates that around 3 million United States taxpayers will be affected by this delay.
If you are planning to take the American Opportunity Tax Credit or the Lifetime Learning Credit on this year’s taxes, you will likely be disappointed to find out that you will be able to file at the normal time. Remember, however, that these credits can reduce your tax bill substantially and can provide larger refunds that can be used to cover college costs, so it is worth waiting.