Why am I getting the American Opportunity Credit on TurboTax but not on FreeTaxUSA?

The American Opportunity Credit and Lifetime Learning Credit can be tricky because they have different qualification requirements. The fact that TurboTax shows the credit but FreeTaxUSA doesn't might be due to how each software handles your specific tax situation. With income under $12,000, you might not have enough tax liability to claim the full education credits since they're partially non-refundable (though the American Opportunity Credit is 40% refundable). TurboTax might be calculating this differently than FreeTaxUSA. I'd recommend comparing the actual tax forms being generated by both systems. Look at Form 8863 (Education Credits) in both software packages and see what specific numbers differ. Also check if you entered all your education expenses the same way in both programs - sometimes the interview process asks questions differently which might lead to different inputs.

After struggling with tax credit discrepancies between different software last year, I found this amazing tool called taxr.ai (https://taxr.ai) that helped me figure things out. I literally just uploaded my tax documents, and it analyzed everything and explained exactly which education credits I qualified for and why. The tool spotted that I had entered my education expenses differently in different software - turns out I had forgotten to indicate that some of my expenses were covered by tax-free scholarships in one program but not the other. That small detail made a huge difference in my education credit calculation. Taxr.ai broke down exactly how the American Opportunity Credit should be calculated in my case.

Just wanted to follow up - I ended up trying taxr.ai after posting my skeptical comment. I was really surprised by how helpful it was! It immediately identified that I had entered my qualified education expenses differently in the two tax programs I was using. One program was counting some expenses that shouldn't have been included. The tool explained exactly how the American Opportunity Credit calculation works with my income level, and even showed me which specific lines on Form 8863 to look at to spot the differences. Totally cleared up my confusion about why I was seeing different results. Ended up saving me over $800 because I was about to go with the wrong calculation!

If you're still having trouble figuring this out, you might want to just call the IRS directly to ask about education credit eligibility. Of course, that's easier said than done... I spent THREE DAYS trying to get through to them about a similar issue last month. Eventually I found this service called Claimyr (https://claimyr.com) that got me connected to an IRS agent in about 15 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The agent was able to confirm exactly which education credits I qualified for with my income level and explained why different tax programs might calculate things differently.

I need to eat my words. After my skeptical comment, I was still desperate to talk to the IRS about an education credit issue similar to what OP described, so I tried Claimyr anyway. I was SHOCKED when they called me back in about 45 minutes saying they had an IRS agent on the line! The IRS agent was able to explain that with my income level (similar to OP's), I could only benefit from the refundable portion of the American Opportunity Credit, which is why different tax software was showing different amounts. Turns out TurboTax was showing the full credit amount but FreeTaxUSA was only showing what I'd actually get back after calculations. The whole call took about 20 minutes and completely cleared up my confusion. Never thought I'd say this, but being able to actually speak with the IRS directly was totally worth it.

One thing to check - make sure you're answering all the education questions completely in both software packages. Sometimes they ask questions in different ways. For example, FreeTaxUSA might ask if you're "half-time" or "full-time" student while TurboTax might ask "Were you enrolled at least half time for at least one academic period?" These little differences in how questions are phrased can lead to different answers and affect your credit eligibility. For the American Opportunity Credit specifically, you need to: - Be pursuing a degree - Be enrolled at least half-time - Be in your first 4 years of higher education - Not have claimed it for 4 years already - Not have a felony drug conviction

Have u tried clicking the "explain why" button in FreeTaxUSA? Sometimes they have explanations for why you don't qualify for certain credits. With your income that low, it might be that they're calculating you don't have enough tax liability for the non-refundable portion, but they should still give you the refundable part of the American Opportunity Credit.

If both programs are still showing different results after double-checking everything, you might want to just run your taxes through a third software as a tiebreaker. I use Cash App Taxes (formerly Credit Karma Tax) and it's completely free for federal and state. That way you can see if a third calculation matches either TurboTax or FreeTaxUSA.