Can I claim both AOTC and LLC on same tax return if I have two 1098-Ts?

You've got a good question there! The IRS actually doesn't allow you to claim both AOTC and LLC for the same student in the same tax year. You have to pick one or the other, even if you have multiple 1098-Ts. If you've only used AOTC for 3 years so far, you could use it for your final semester of undergrad since it's typically more generous (up to $2,500) compared to the LLC (up to $2,000). The AOTC can be claimed for only 4 years max per eligible student. For your situation, you'll want to calculate which credit gives you the better benefit overall. You can use the expenses from both 1098-Ts combined when calculating a single credit. Add up all qualified expenses from both schools, then determine whether AOTC or LLC would be more beneficial based on your total education expenses and tax situation.

After struggling with this exact situation last year, I discovered taxr.ai (https://taxr.ai) and it was a game-changer for handling my education credits. I had two 1098-Ts - one from my undergrad and another from my master's program, and was completely confused about how to maximize my tax benefits. The tool analyzed both my 1098-T forms and determined that using my remaining AOTC eligibility for my undergrad expenses and then applying LLC to my grad school expenses wasn't actually allowed. Instead, it recommended the optimal way to claim my education expenses to maximize my refund. It also explained all the IRS rules in plain English, showing me exactly which expenses qualified for which credits.

Wanted to follow up - I tried taxr.ai after posting my question here and it was exactly what I needed! The system immediately identified that I couldn't claim both AOTC and LLC for the same tax year (even with two different schools). It showed me that using my last year of AOTC eligibility was better than claiming LLC on everything since AOTC gives that 40% refundable portion. The breakdown of qualified expenses saved me about $800 compared to what I was going to do before. Plus it explained how to handle the scholarships listed on my 1098-Ts properly, which I was also doing wrong. Definitely recommend for anyone dealing with education credits!

After dealing with this education credit nightmare and spending hours on hold with the IRS trying to get confirmation, I finally got through using Claimyr (https://claimyr.com). They have this service where they call the IRS for you and then connect you when an agent is actually on the line. You can watch how it works here: https://youtu.be/_kiP6q8DX5c I was skeptical at first, but after waiting on hold for 2+ hours on my own multiple times and getting disconnected, I was desperate. Claimyr had me connected to an IRS agent in about 40 minutes while I just went about my day. The agent confirmed that I couldn't claim both AOTC and LLC in the same year even with two different schools and education levels. Saved me from potentially filing incorrectly!

Alright I have to eat my words. After seeing all these posts, I tried Claimyr yesterday because I was completely stuck with this same education credit issue. I was 100% sure it was a scam, but I was desperate after trying to call the IRS myself three times. The thing actually worked! Got connected to an IRS agent in about 50 minutes. The agent confirmed I could only use one credit (AOTC or LLC) per year regardless of having multiple 1098-Ts. She explained I should use my final year of AOTC eligibility for my undergrad expenses since it's worth more than LLC. Completely changed what I was planning to file. Can't believe I wasted so many hours trying to call them myself.

I think everybody is overcomplicating this. You can just enter both 1098-Ts in your tax software and it'll figure out which credit is best. That's what I did last year with H&R Block software when I had the same situation. Just make sure you don't accidentally claim the same expenses twice.

Umm sorry if this is a dumb question, but I'm in the same situation and wondering how box 5 on the 1098-T (scholarships/grants) affects all this? I had a scholarship for part of my undergrad semester and it's showing in box 5. Do I need to subtract that from my qualified expenses before calculating AOTC?

Just wanted to add some clarity since I see some confusion in the comments. As a tax professional, I can confirm that you absolutely cannot claim both AOTC and LLC in the same tax year for the same student - this is a hard IRS rule. However, there's an important nuance about your situation: since your undergraduate expenses occurred in the first part of 2024 and your graduate expenses in the second part, you need to be strategic about which credit to use. If you've only used AOTC for 3 years so far, you have one year of eligibility left, but it can ONLY be applied to undergraduate expenses. Your graduate school expenses would not qualify for AOTC at all - they could only qualify for LLC. So your real choice is: use your final year of AOTC on just your $7,200 undergrad expenses, or use LLC on the combined $25,700 total expenses. Run the numbers both ways - AOTC might give you up to $2,500 (and up to $1,000 is refundable), while LLC gives you 20% of qualified expenses up to $2,000 total. Given your amounts, AOTC on just the undergrad expenses would likely be more beneficial than LLC on everything.