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posted Feb 22, 2025 6:42:04 PM

AOTC not getting full amount

I have spent well over the amount needed in tuition for 2024 and my total credit for AOTC is $1643. Why is it not the full $2500?

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1 Best answer
Level 15
Feb 22, 2025 7:10:28 PM

The AOTC is only 40% refundable. The other 60% can only be used to offset an actual tax liability. So, the 40% refundable portion ($1000) will show on line 28 of form 1040.  Because your tax liability is low, you get something less than $1500 for the non refundable portion of the AOTC.  See line 19 of form 8863.

1 Replies
Level 15
Feb 22, 2025 7:10:28 PM

The AOTC is only 40% refundable. The other 60% can only be used to offset an actual tax liability. So, the 40% refundable portion ($1000) will show on line 28 of form 1040.  Because your tax liability is low, you get something less than $1500 for the non refundable portion of the AOTC.  See line 19 of form 8863.