What is the main purpose of Form 8863?

Form 8863 is specifically designed for taxpayers to claim education credits, which are designed to help offset the costs of higher education. The two primary education credits that can be claimed on this form are the American Opportunity Credit and the Lifetime Learning Credit. These credits provide significant financial assistance by reducing the amount of tax owed, which can be beneficial for both students and their families.

Using Form 8863, taxpayers can report the qualified education expenses paid for themselves, their spouses, or their dependents, and receive tax benefits in the form of credits that directly lower their tax bill dollar for dollar. This means that eligible students can reduce their overall educational expenses and potentially make higher education more affordable.

The other options pertain to different tax matters unrelated to education credits, which further clarifies the specific purpose of Form 8863 and reinforces that its primary focus is on reporting and claiming education-related tax credits.