How have I not maximized the American Opportunity Credit?

[evantheroux]

I have spent over $4000.00 on school expenses this year, why am I only receiving $1000.00 from the AOTC? To be specific I have spent around $12,000 on educational expenses.

[Hal_Al · Accepted solution]

There's a new urban myth among college students that says they can get a $1000 from the government just for filing a tax form. For most of them, they simply aren't eligible. A student, under age 24, is only eligible for the refundable portion of the American Opportunity Credit if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans or student loans & grants. You must have actually paid tuition, not had it paid by scholarships & grants.  It is usually best if the parent claims that credit.   

[evantheroux]

I am supporting myself and paid over $4000 out of pocket with my own money which from I understand "maximizing" the credit.

[Hal_Al]

You must be supporting yourself with earned income. If you have enough earned income to be supporting yourself; then you have enough income to have a tax liability, meaning your American Opportunity Credit will be more than $1000.

The earned income support question is part of the personal info interview, not  the education interview. Go back and check your answer.

The tax return of a person, under 24, claiming the AOTC, and not showing any earned income is a a red flag to the IRS