American Opportunity Credit

[sdruiett]

The program says We are eligible for $2500 per student for a total of $5000 but it doesn't register on the amount that we will get back from the government.  Meaning we fill out our taxes and it says we should be getting $4000 back.  When we add the educational expenses, it say we should be getting the credit but it doesn't change the $4000 to $9000.  Why not?

[KrisD15]

If you were getting 4,000, two American Opportunity Tax Credits would more than likely increase that to 6,000.

Of the 2,500 credit, 1500 in non-refundable, which means that can lower your tax liability. One the tax liability gets to zero, that portion of the credit is done.

Of the 2,500 credit, 1,000 is refundable, so if the tax liability is zero, that portion of the credit will add to your refund. 

I assume your tax liability is zero-ed out before the credit is applied so only the refundable portion is usable.