American Opportunity Tax Credit Fifth Year Senior

[sunblimis1]

I found a similar answer for my question but it didn't provide enough details. I would like to ask if I would be qualified to claim my American Opportunity tax credit on my 5th year being a senior. I attended a community college from Fall 2009 - Spring 2011. Currently, I am studying at a four-year college from Fall 2011 to present (Spring 2014). I haven't finished my bachelor's degree as of the end of 2013. That being said, I am currently working on my 5th year and have completed over 120 credits. Furthermore, my parents claimed me as a dependent on their previous tax year and have taken the American Opportunity  credit twice so far (for years 2011 and 2012). I turned 24 in October and made more than $3900 in 2013, so I believe my parents can no longer claim me as a dependent. So I am concerning whether or not I am able to claim the American Opportunity credit on my tax return if I am filing as a single person who cannot be claimed as a dependent. Thanks!

[lyudmilla]

Here is what I found after doing some research on eligibility requirements for AOTC:

1) From IRS Publication 970:

"Example 2.

After taking classes at College V on a

part-time basis for a few years, Shelly became a full-time

student for the 2013 spring semester. College V classified

Shelly as a second-semester senior (fourth year) for the

2013 spring semester and as a first-semester graduate

student (fifth year) for the 2013 fall semester. Because

College V did not classify Shelly as having completed the

first 4 years of postsecondary education as of the begin-

ning of 2013, Shelly is an eligible student for tax year

2013. Therefore, the qualified education expenses paid

for the 2013 spring semester and the 2013 fall semester

are taken into account in calculating the American oppor-

tunity credit for 2013."

2) From http://webs.purduecal.edu"
                       STUDENT CLASSIFICATION FORMULA CREDIT HOURS CLASSIFICATION CATEGORY
0-15          1          Freshman
16-30        2          2nd Semester Freshman
31-45        3          Sophomore
46-60        4          2nd Semester Sophomore
61-75        5           Junior
76-90        6          2nd Semester Junior
91-105      7           Senior
106+         8           2nd Semester Senior

From my understanding as long as your college doesn't classify you as a graduate at the beginning of the tax year (Jan 2013 in this case) and you or your parents didn't claim AOTC or Hope combined 4 times you are an eligible student.

[KarenD]

If the American Opportunity Credit (or the Hope Credit) has already been claimed for you as the student for four years, this credit is no longer available to you.  You may, however, qualify for the Lifetime Learning Credit, so be sure to follow-through with the Education portion of the TurboTax interviews.

For more information on this topic, you may visit IRS Publication 970: http://www.irs.gov/publications/p970/ch02.html

[cathy-e-easter]

what if you did not claim the credit one of the 5 years? My son did not claim his freshman year as he had no income and our (mine and husband's) income was too high to claim. Can he claim for the final year?

[cathy-e-easter]

<a href="http://apps.irs.gov/app/vita/content/23/23_07_005.jsp?level=advanced" rel="nofollow" target="_blank">http://apps.irs.gov/app/vita/content/23/23_07_005.jsp?level=advanced</a>  here is info from the IRS wesbite. Looks like he should be able to claim it one more year.

[ryan1]

The original answer given above stating that as long as you are not classified as a graduate student you can take the credit is not correct.  Most schools don't classify someone as a graduate student until they have an undergraduate degree.  Specifically for the Original Poster who said he had more than 120 credit hours, the requirement is that you cannot have completed 4 years worth of credits (as determined by the school).  Most schools look at 120 hours as the completion of 4 years worth of credits and therefore eligible for graduation (assuming other criteria have been met), although the Original Poster would need to look at his own school's criteria.

Here is the actual criteria from the IRS along with the link...

Completion of first 4 years.   A student has completed the first 4 years of postsecondary education if the institution at which the student is enrolled awards the student 4 years of academic credit at that institution for coursework completed by the student before 2015. This student generally wouldn't be an eligible student for purposes of the American opportunity credit.

Exception.   Any academic credit awarded solely on the basis of the student's performance on proficiency examinations is disregarded in determining whether the student has completed 4 years of postsecondary education.

<a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p970/ch02.html">https://www.irs.gov/publications/p970/ch02.html</a>

[ryan1]

The original answer given above stating that as long as you are not classified as a graduate student you can take the credit is not correct.  Most schools don't classify someone as a graduate student until they have an undergraduate degree.  Specifically for the Original Poster who said he had more than 120 credit hours, the requirement is that you cannot have completed 4 years worth of credits (as determined by the school).  Most schools look at 120 hours as the completion of 4 years worth of credits and therefore eligible for graduation (assuming other criteria have been met), although the Original Poster would need to look at his own school's criteria.

Here is the actual criteria from the IRS along with the link...

Completion of first 4 years.   A student has completed the first 4 years of postsecondary education if the institution at which the student is enrolled awards the student 4 years of academic credit at that institution for coursework completed by the student before 2015. This student generally wouldn't be an eligible student for purposes of the American opportunity credit.

Exception.   Any academic credit awarded solely on the basis of the student's performance on proficiency examinations is disregarded in determining whether the student has completed 4 years of postsecondary education.

https://www.irs.gov/publications/p970/ch02.html