American Opportunity Credit

[krameb]

How does the American Opportunity Credit is calculated in Turbotax?

I entered the 1098-T for my two daughters but only got a $205 refund for each.

Is there a proportional calculation done?

[Hal_Al]

The AOC is 100% of the first $2000 of tuition paid and 25% of the next $2000.  $2500 maximum. It is 40% refundable ($1000 max). That is, you get part of it even if you have no tax liability.  See the calculations on form 8863.

[krameb]

Thank you. Understood! :(

[LoganathanB]

Two factors can reduce your credit. 

• Modified Adjusted Gross Income
• Your Tax Liability

Click on the link for more information

American Opportunity Tax Credit