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12364: 1040 - Recapture of Education Credit

1040 Individual Data Entry

The taxpayer received an education credit in an earlier year. In the tax year, he received a refund of the qualified expenses on which the credit was based. Where do I enter a recapture of the credit?


Screen 5, line 12a(3) in Drake19 (Screen 5, line 11a(3) in Drake18, line 44 in Drake17 and prior). Note that Drake prints the literal “ERC” and the amount recaptured on the line (the information required by box c) and adds the entry to the calculated total tax on line 11 (line 44 in Drake17 and prior).

This is the "Tax" line on Form 1040. For this kind of entry, IRS 1040 instructions (page 36) explain:

"Recapture of an education credit. You may owe this tax if you claimed an education credit in an earlier year, and either tax-free educational assistance or a refund of qualified expenses was received in 2019 for the student. See Form 8863 for more details. Check box 3 and enter the amount and “ECR” in the space next to that box."

IRS instructions for Form 8863 (page 5) provide more detail on how to figure recapture for a refunded educational credit and explain when tax-free educational assistance may be considered a refund subject to recapture.

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