Form 8917 - Tuition and Fees Deduction

The American Opportunity Credit as well as the Lifetime Learning Credit can be substituted by the tuition and fees deduction by taxpayers who are eligible for it. Eligibility for the tuition and fees deduction is similar to the one for American Opportunity Credit: 

• The student can be either the taxpayer, their spouse or their dependent who is enrolled at an educational institution that is eligible 
• An eligible educational institution refers to any accredited post-secondary, private, non-profit university, college or vocational school. It also includes schools outside the U.S that participate in student loan programs managed by the Department of Education. 
• Normally, students are served with Form 1098-T by the institution they are in. There are certain institutions that due to the existing rules, are not obligated to send Form 1098-T to the students. Students in such institutions can still claim the deduction despite not receiving Form 1098-T. The students claiming the deduction must substantiate their qualified expenses and enrollment in the educational institution they are in, regardless of whether they received Form 1098-T. 
• Tuition, nonacademic fees for enrollment, books, supplies as well as equipment needed for study are Qualified expenses. Other expenses such as Fees for noncredit courses, sports and games can be Qualified expenses only in the event that they are either part of the degree program or they assist students in the acquisition or improvement of job skills. 
• Insurance, medical expenses (inclusive of the student health fees), room and board, transport costs, as well as other personal living expenses, fees for non credit courses that are not part of the degree program of the student are not Qualified expenses. Expenses entered elsewhere in the return as deduction cannot be considered Qualified expenses. 
• Tax-free educational assistance, for instance the assistance received through the employer of the taxpayer, Pell grants as well as other scholarships and fellowships, veterans organizations exclusive of gifts, bequests and inheritance, can be used to adjust Qualified expenses. 
• To figure out the present year’s deduction, the Qualified expenses paid in the very year is used. This is even if they are inclusive of payment for an academic period in the first three months of the successive year. 

Additional information:

IRS: Instructions for Form 8917 - Tuition and Fees Deduction

IRS: Publication 970 - Tax Benefits for Education