What does Form 8863 relate to?

Form 8863 is specifically used to claim education credits, which includes the American Opportunity Credit and the Lifetime Learning Credit. These credits provide financial assistance to individuals who are paying for higher education expenses. The American Opportunity Credit is generally available for the first four years of post-secondary education, while the Lifetime Learning Credit can be claimed for an unlimited number of years and is applicable to a wider range of educational pursuits, including courses taken to acquire or improve job skills.

Using Form 8863, taxpayers can calculate the amount of their eligible education expenses and determine the education credits they can claim on their tax returns. This form is crucial for those seeking to alleviate some of the financial burdens associated with education costs, thereby promoting higher education attainment.

The other options relate to different tax benefits: the Tuition and Fees Deduction is handled on a different form and offers a deduction rather than a credit; the Child and Dependent Care Credit pertains to the care of dependents while taxpayers work or look for work; and the Adoption Tax Credit addresses expenses related to adopting a child. Each of these credits and deductions has its own specific forms and eligibility requirements, underscoring the unique purpose of Form 8863 in the realm of education-related financial assistance.