U.S. · Form 8863 line 8
Form 8863 line 8 refundable AOC.
Lines 1 to 9: the phase-out, the 40% refundable part, and the under-24 rule.
Line 8 is the refundable American opportunity credit: line 7 times 40%, entered on Form 1040 or 1040-SR, line 29. Line 7 is your total credit (line 1, up to $2,500 per student) times the MAGI phase-out fraction on line 6. If the under-24 conditions on line 7 apply, check the box, skip line 8 and carry line 7 to line 9, so none of it is refundable.
Figure lines 1 to 9
Result
Reference table
| Line | What it holds |
|---|---|
| Line 1 | Total of Part III line 30 for all AOC students (up to $2,500 each). |
| Line 2 | $180,000 if married filing jointly; $90,000 for single, head of household or qualifying surviving spouse. |
| Line 3 | MAGI, usually Form 1040 or 1040-SR line 11b. |
| Line 4 | Line 2 minus line 3. If zero or less, no education credit. |
| Line 5 | $20,000 joint; $10,000 for the other statuses. |
| Line 6 | 1.000 if line 4 is at least line 5; otherwise line 4 divided by line 5 as a decimal of at least three places. |
| Line 7 | Line 1 times line 6. Unless the under-24 box is checked, go to line 8. |
| Line 8 | Line 7 times 40%. Enter on Form 1040 or 1040-SR, line 29. |
| Line 9 | Line 7 minus line 8. Goes to Credit Limit Worksheet line 2. |
Who cannot take the refundable part
The line 7 instructions say you cannot claim any part of the American opportunity credit as refundable if you were under age 24 at the end of 2025 and all of these apply: (1) you were under 18, or 18 with earned income less than half your support, or over 18 and under 24 as a full-time student with earned income less than half your support; (2) at least one parent was alive at the end of 2025; and (3) you are not filing a joint return. If you meet those conditions, check the box next to line 7, skip line 8 and enter line 7 on line 9.
How the credit itself is built
The credit is 100% of the first $2,000 and 25% of the next $2,000 of adjusted qualified education expenses per eligible student, up to $2,500. It phases out for MAGI between $80,000 and $90,000 ($160,000 and $180,000 joint); at $90,000 or more ($180,000 joint) there is no credit. The refundable share is 40%, so 60% remains nonrefundable and flows to line 9 and onward to line 19.
Worked example
One student has $4,000 of adjusted qualified expenses, so line 1 is $2,000 + 25% of $2,000 = $2,500. A single filer with MAGI of $60,000 has line 4 of $30,000, which is at least line 5 ($10,000), so line 6 is 1.000 and line 7 is $2,500. Line 8 is 40%, or $1,000, and line 9 is $1,500. This matches the IRS’s own example, which gives a refundable AOC of $1,000 and a nonrefundable credit of up to $1,500 on $4,000 of expenses. Income is illustrative.
What this page does not do
It does not decide whether the student is eligible: the student must be enrolled at least half-time in a degree program, must not have completed four years of postsecondary education, must not have a felony drug conviction, and the credit can be claimed for only four tax years per student. It also does not apply the earned-income and support tests; use the instructions’ question list. This tool handles one student; for several, add each student’s line 30 on line 1.
Sources
- Instructions for Form 8863 (2025): Part I lines 1 to 9, the line 7 refundable exception and the AOC rules. Read November 2, 2026.
- Form 8863 (2025): The form itself, for exact line wording. Read November 2, 2026.
These are the tax year 2025 edition instructions and forms (published for returns filed in 2026). The IRS revises them each year, so thresholds, line numbers and limits can change; check the current edition before relying on a figure.
Frequently asked questions
What is line 8 on Form 8863?
The refundable American opportunity credit: line 7 times 40% (0.40), entered on Form 1040 or 1040-SR, line 29.
How much of the American opportunity credit is refundable?
40%, up to $1,000 on the maximum $2,500 credit. The rest is nonrefundable.
Who cannot claim the refundable credit?
A person under age 24 at the end of 2025 who meets all three line 7 conditions: the age, earned income and support test, a living parent, and not filing a joint return.
What do I do if the line 7 box applies?
Check the box, skip line 8 and enter the amount from line 7 on line 9. The whole allowed credit is then nonrefundable.
How is the credit per student computed?
100% of the first $2,000 of adjusted qualified education expenses plus 25% of the next $2,000, for a maximum of $2,500 per student.
Not tax or legal advice
This page summarizes IRS instructions and is not tax, legal or financial advice. A CPA, enrolled agent or the IRS can confirm what applies to your situation. Everything runs in your browser; nothing you enter is sent anywhere.