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soohan20
New Member

I'm not getting full American Opportunity Credit of 2.5k. My educational expenses are well over 10k but my calculated credit is only 2k. Why is this?

 
1 Best answer

Accepted Solutions
HelenaC
New Member

I'm not getting full American Opportunity Credit of 2.5k. My educational expenses are well over 10k but my calculated credit is only 2k. Why is this?

There are two parts to the American Opportunity Credit (AOC). The first is a maximum nonrefundable credit of up to $1,500 and the second is a $1,000 refundable credit. 

nonrefundable credit is subtracted from your income tax liability, up to the total amount you owe. But unlike a refundable tax credit, a nonrefundable credit cannot reduce your tax balance beyond zero. 

If your tax is less than $1,500, then your AOC will be less then $1,500. Depending on the tax form you are filling out, see form:

  • 1040A Line 28 Tax
  • 1040 Line 44 Tax

To preview your 1040 Form in TurboTax Online:

  1. On the left navigation bar, click on Tax Tools then Tools.
  2. Under Tools Center, click on View Tax Summary
  3. On the left navigation bar, click on Preview my 1040.

For additional information, click on What Is the Difference Between a Refundable and a Nonrefundable ...

Related information:

[Edited 1-18-19|8:25 am PST]

View solution in original post

2 Replies
HelenaC
New Member

I'm not getting full American Opportunity Credit of 2.5k. My educational expenses are well over 10k but my calculated credit is only 2k. Why is this?

There are two parts to the American Opportunity Credit (AOC). The first is a maximum nonrefundable credit of up to $1,500 and the second is a $1,000 refundable credit. 

nonrefundable credit is subtracted from your income tax liability, up to the total amount you owe. But unlike a refundable tax credit, a nonrefundable credit cannot reduce your tax balance beyond zero. 

If your tax is less than $1,500, then your AOC will be less then $1,500. Depending on the tax form you are filling out, see form:

  • 1040A Line 28 Tax
  • 1040 Line 44 Tax

To preview your 1040 Form in TurboTax Online:

  1. On the left navigation bar, click on Tax Tools then Tools.
  2. Under Tools Center, click on View Tax Summary
  3. On the left navigation bar, click on Preview my 1040.

For additional information, click on What Is the Difference Between a Refundable and a Nonrefundable ...

Related information:

[Edited 1-18-19|8:25 am PST]

soohan20
New Member

I'm not getting full American Opportunity Credit of 2.5k. My educational expenses are well over 10k but my calculated credit is only 2k. Why is this?

Thank you for your explanation! It's still confusing to me. Does that mean I would be getting 1000 + Federal tax amount that I have paid? Thanks!
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