What is required to be eligible for the $2,000 Education Tax Credit

marko Member Newcomer
edited January 15 in Credits/Deductions

The reason I ask, is because I thought I had to make a $2,000 payment from my own funds (instead of the 529), but when I filed my taxes, it never asked me about that transaction.

Am I eligible for the $2,000 Education Tax Credit if I pay $13,000… ALL from my 529 for qualified Tuition and fees?


  • kiarab
    kiarab FreeTaxUSA Agent


    According to the IRS, you cannot use tax free funds and claim an education credit as you have already received a tax benefit. It would be sort of double dipping. Since the 529 is non-taxable if used for educational expenses, it would not qualify. https://www.irs.gov/credits-deductions/individuals/qualified-ed-expenses

    If you did pay for qualified educational expenses out of your own pocket (so income subject to taxes), then it is much more likely that you should qualify for an educational credit, like the AOTC. There are other factors, like income and if you are a dependent. If you ever have any questions about why you are not receiving a credit, customer support can help you see why it is not applying to your return.