Updated October 21, 2026. Quick answer: The Credit Limit Worksheet in the Form 8863 instructions caps the nonrefundable education credits at your tax. It adds Form 8863 lines 18 and 9, compares that with Form 1040 line 18 less certain Schedule 3 credits, and takes the smaller. Line 7 goes on Form 8863 line 19 and Schedule 3 line 3.
What this worksheet is for
Line 19 of Form 8863 has no number to copy. The instructions say “Complete this worksheet to figure the amount to enter on line 19.”. The line is covered at Form 8863 lines 9 to 19, and the form at Form 8863.
The worksheet line by line
| Line | What the worksheet says |
|---|---|
| Where it is used | “Enter the amount from line 7 of the Credit Limit Worksheet here and on Schedule 3 (Form 1040), line 3.” |
| Purpose | “Complete this worksheet to figure the amount to enter on line 19.” |
| 1 | “Enter the amount from Form 8863, line 18” |
| 2 | “Enter the amount from Form 8863, line 9” |
| 3 | “Add lines 1 and 2” |
| 4 | “Enter the amount from Form 1040 or 1040-SR, line 18” |
| 5 | “Enter the total of your credits from Schedule 3 (Form 1040), lines 1, 2, 6d, and 6l” |
| 6 | “Subtract line 5 from line 4” |
| 7 | “Enter the smaller of line 3 or line 6 here and on Form 8863, line 19” |
A worked example
Illustration, not an IRS example. Every input is invented.
| Item | Illustration |
|---|---|
| Line 1 (an invented input for the computed example: Form 8863 line 18) | $1,800 |
| Line 2 (suppose Form 8863 line 9 is) | $600 |
| Line 3, computed: line 1 plus line 2 | $2,400 (computed) |
| Line 4 (suppose Form 1040 line 18 is) | $3,000 |
| Line 5 (suppose the listed Schedule 3 credits total) | $200 |
| Line 6, computed: line 4 minus line 5 | $2,800 (computed) |
| Line 7, computed: smaller of line 3 and line 6 | $2,400 (computed) |
The $2,400 goes on Form 8863 line 19 and Schedule 3 line 3. Had line 6 been smaller than line 3, the cap would have cut the credit.
Where the number comes from
Line 1 is the lifetime learning credit result and line 2 is the leftover American opportunity credit, both on Form 8863 and covered at Form 8863 lines 9 to 19. Line 4 is the tax on Form 1040 line 18, and line 5 uses credits from Schedule 3, covered at Form 1040 lines 29, 30 and 31.
Where it goes next
Line 7 is entered “here and on Form 8863, line 19”, and on Schedule 3, covered at Schedule 3 line 3, which flows to Form 1040 line 20, captioned “Amount from Schedule 3, line 8”. The student-level math is in the Adjusted Qualified Education Expenses Worksheet.
Edition and line numbers
This page reads the Instructions for Form 8863 (2025), the current file irs.gov served on 2026-10-21 (sha256 in the kit data). The Credit Limit Worksheet in it is for the tax year 2025 return, filed in 2026. Check the tax year printed on the worksheet in your own instructions and use that year’s line numbers, because a different year’s worksheet can number or word its lines differently.
Common mistakes
- Entering line 3 instead of the smaller amount. Line 7 says “Enter the smaller of line 3 or line 6”
- Leaving out Schedule 3 credits on line 5, which reads “Enter the total of your credits from Schedule 3 (Form 1040), lines 1, 2, 6d, and 6l”
- Using the refundable part of the American opportunity credit here. Line 2 is “Enter the amount from Form 8863, line 9”
Related: Form 8863, Form 8863 lines 9 to 19, Schedule 3 line 3, Form 1040 lines 29, 30 and 31, education credits, and the Adjusted Qualified Education Expenses Worksheet.
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Answer againSources
- Instructions for Form 8863, Education Credits (2025): https://www.irs.gov/pub/irs-pdf/i8863.pdf
- Form 1040 (2025): https://www.irs.gov/pub/irs-pdf/f1040.pdf
Read from the IRS documents linked above on October 21, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.