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Form 1098-T - Adjustment and Recapture of Credit
1
When there is an amount in Box 4 and/or Box 6 of the Form 1098-T, Tuition Statement, and you claimed an education credit in a prior tax year (i.e., American Opportunity Credit or Lifetime Learning Credit), you need to recalculate that credit, taking into account the adjustment, and then enter the decrease in credit on the current year's return.

NOTE: The amount of the credit recapture is NOT the adjustment amount from the Form 1098-T. Rather it is the difference between the credit as it was originally calculated and the recalculated credit amount once the adjustment has been made to the tuition expense on the prior year’s return. You may find it helpful to review a copy of your prior year's Form 8863 and then fill out a revised copy using updated figures. 
Once you have calculated the amount, follow the steps below to enter it on your return. This amount appears on Form 1040, as "ECR" and increases the tax on the federal return. 

Online
Dashboard
  1. From within your TaxAct return, click Resources. 
    • On smaller devices, click the menu at the top left corner of your screen, then make your selection.
  2. Under My Return, click Federal Search. 
  3. Click the Education drop-down, then click Recapture of prior year education credits. 
  4. Enter the Recapture of prior year education credit amount you have calculated, then click Continue.
Classic
  1. From within your TaxAct return, click Federal.
    • On smaller devices, click the menu at the top left corner of your screen, then make your selection.
  2. Click the Education drop-down, then click Recapture of prior year education credits.
  3. Enter the Recapture of prior year education credit amount you have calculated, then click Continue.
Desktop
  1. From within your TaxAct return, click Federal. 
  2. Click the Education drop-down, then click Recapture of prior year education credits.
  3. Enter the Recapture of prior year education credit amount you have calculated, then click Continue.

If you had claimed the Tuition and Fees Deduction (not available after 2020), you would have added the amount as an adjustment to your taxable income on IRS Schedule 1 (Form 1040).