Hey there! I got the American Opportunity refund but I am only getting $1818 back instead of the full $2500. I am a full time student that received no scholarships.

[Hal_Al]

Only $1000 of the potential $2500 is refundable.  The $818 on line 3 of schedule 3* was all that was needed to get your tax liability down to 0.  The refundable $1000 is on line 18c of form 1040.

*Also shown on line 19 of form 8863 and  is  all or  part of the amount on line 13b of form 1040.

[CatinaT1]

The American Opportunities Credit has two different parts.

Total Credit = $2,500

Non-Refundable Portion = $1,500

Refundable Portion = $1,000

The non-refundable portion can only be used to reduce your tax liability.  You can use up to $2,500 to reduce your tax liability.  If you do not the full amount toward reducing your tax liability, the amount left over, up to $1,000 can be added to any refund amount.

[saynarenee]

Thanks for responding! I met all the requirements for the $2500 refund total. I paid about $4000 each semester I was in school. In both Spring and Fall of 2019. I am just confused why I am not getting the full $2500 when other students I have talked to in my same situation got the full $2500. I file as an independent, I fully support myself, I received no scholarships or grants, and I am single with no children. I only made $20,000 last year as well. Thanks for your time and help!

[AnnetteB6]

You may have qualified for the full $2500 in American Opportunity Tax Credit, but the circumstances on your tax return are keeping you from getting the full benefit.  There is nothing you can do to change that if you have reported all of your income.  

As stated earlier, the total $2500 credit is made up of two pieces.  One piece worth $1500 can be used to 'pay' the income tax on your return.  If your income tax is less than $1500, then you will not be able to use all $1500 of that part of the education credit.  The leftover part is unused and cannot be added to your refund.  It just disappears.  That's what it means to be 'non-refundable'.

The other piece worth $1000 can be added to your refund.  That is 'refundable'.  You are receiving the full benefit of that part of the education credit.  

When you say other students in a similar situation to you are getting the full amount, that may be true, but the main difference has to do with the income and income tax on the return and not the education expenses themselves.