Who qualifies for American Opportunity Credit?
To be eligible for AOTC, the student must: Be pursuing a degree or other recognized education credential. Be enrolled at least half time for at least one academic period* beginning in the tax year. Not have finished the first four years of higher education at the beginning of the tax year.
The 1000 came from the 8863. While the total amount of the AOC is worth up to $2,500, only $1,000 of the AOC is actually refundable. This means you can use the other portion to reduce your tax liability if you have any. But, only $1,000 can be directly added to your refund without any tax liability.
Where do I look on Form 8863 to see if I received the American Opportunity Credit or Hope Credit? By looking at form 8863, you have taken the American Opportunity Credit for a student when line 7 of Part I contains a number (non zero).
The AOTC is a tax credit worth up to $2,500 per year for an eligible college student. It is refundable up to $1,000. If you are a college student filing your own return, you may claim this credit a maximum of four times (i.e. once per year for four years).
The Hope and other lifetime learning credits were enacted to encourage higher education and provide a measure of tuition reimbursem*nt for parents (or students) who are paying college tuition and fees. The American Opportunity Tax Credit (AOTC) replaced the Hope Credit in tax year 2009.
- Be pursuing a degree or other recognized education credential.
- Be enrolled at least half time for at least one academic period* beginning in the tax year.
- Not have finished the first four years of higher education at the beginning of the tax year.
You can't take the AOTC if any of the following apply: Your filing status is married filing separately (MFS). You are claimed as a dependent on another person's tax return (such as the taxpayer's parents' return).
| Income Limits for the American Opportunity Tax Credit | ||
|---|---|---|
| Single | Married Filing Jointly | |
| Full Credit | $80,000 or less | $160,000 or less |
| Partial Credit | More than $80,000 but less than $90,000 | More than $160,000 but less than $180,000 |
| No Credit | More than $90,000 | More than $180,000 |
If you take half the course load for at least one semester or other academic period of each tax year, and your college does not consider you to have completed the first four years of college as of the beginning of the tax year, you can qualify to take the AOTC for up to four tax years.
You don't need to "prove it", when you file your tax return. You claim the credit on form 8863, then lines 50 & 68 of form 1040, based on your own records. If you have an IRS letter denying the credit, you need to explain the circ*mstances.
Can parents claim the American Opportunity Credit?
Parents of dependent students can also claim the credit. To qualify for the Lifetime Learning Credit, you must meet the following criteria, according to the IRS: Be enrolled or taking courses at an eligible educational institution.
If your income is high enough to lose out on the dependent exemption for a child attending college, your family may benefit from opting not to claim your college student as a dependent. By this point, your child is over the age of 17, so the child tax credit is not available.
Answer: Yes, you may claim the excess expenses by filling out Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits). To claim the credit, qualified expenses are reduced by the amount of any tax-free educational assistance.
There are several differences and some similarities between the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). You can claim these two benefits on the same return but not for the same student or the same qualified expenses.
If you are a student in the first four years of undergraduate enrollment, the AOTC is likely the better choice for you. It has a higher maximum credit and a higher credit percentage. However, if you are taking courses to improve your job skills or are enrolled in graduate school, the LLC may be a better option for you.
The AOTC can only be used for undergraduate expenses, while the Lifetime Learning Credit is more flexible. The AOTC can only be claimed for four tax years; the Lifetime Learning Credit can be claimed an unlimited number of times.
The American Opportunity Tax Credit (AOTC) is a partially refundable tax credit that provides up to $2,500 per student per year to pay for college. The tax credit is based on up to $4,000 in eligible higher education expenses, equal to 100% of the first $2,000 in eligible expenses and 25% of the second $2,000.
American Opportunity Tax Credit
The AOTC is worth up to $2,500. The AOTC is figured by taking the first $2,000 paid towards the student's qualified educational expenses and adding 25 percent of the next $2,000 in educational expenses, up to $2,500. The AOTC is calculated per student, not per tax return.
- Bad debts.
- Canceled debt on home.
- Capital losses.
- Donations to charity.
- Gains from sale of your home.
- Gambling losses.
- Home mortgage interest.
- Income, sales, real estate and personal property taxes.
To deduct student loan interest, you must have taken out the loan to pay education expenses for yourself, your spouse, or someone who was your dependent at the time. You aren't eligible for the deduction if you (or your spouse if you're married filing a joint return) can be claimed as a dependent by someone else.
What counts as 4 years of college credit for taxes?
The "first four years" refers to the amount of academic credit that has been awarded. Generally, it's what schools use to classify students (junior, senior, etc.).
You can claim the American Opportunity Tax Credit (AOTC) on 100% of the first $2,000 of your college tuition and expenses. You can also claim 25% of the next $2,000 in tuition and related expenses, up to a maximum of $2,500 per year.
The American Opportunity Education Credit is available to be claimed for a maximum of 4 years per eligible student. This includes the number of times you claimed the Hope Education Credit (which was used for tax years prior to 2009).
The American Opportunity Tax Credit is based on 100% of the first $2,000 of qualifying college expenses and 25% of the next $2,000, for a maximum possible credit of $2,500 per student. You can claim the AOTC for a credit up to $2,500 if: Your student is in their first four years of college.
If the taxpayer was under age 24 at the end of the year and certain conditions apply, they may not qualify to receive the refundable portion of the American Opportunity Credit.
