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I am only receiving $1,000 back for my American Opportunity Credit. How do I maximize my return to receive the full $2,500?

 
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1 Reply
Hal_Al
Level 15

I am only receiving $1,000 back for my American Opportunity Credit. How do I maximize my return to receive the full $2,500?

Only $1000 is refundable.  The other $1500 can only be used to reduce your tax liability. If you have no calculated tax, you don't get the full $2500. 

 

If you have no tax liability, that means your income is low.  If your income is low, maybe somebody can claim you as a dependent.

 

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 full time unmarried student, under age 24, even if you don't qualify as a dependent, 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 usually must have actually paid tuition, not had it paid by scholarships & grants.  It is usually best if the parent claims that credit. 

You cannot claim a credit if you are, or can be, claimed as a dependent by someone else.

 

Reference: Line 7 instructions for form 8863. https://www.irs.gov/instructions/i8863

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