Why is my American Opportunity Credit $1,226?

[robintruax]

Hi all. This is my first year filing taxes and I'm trying to work out why TurboTax is only able to claim $1,226 from the American Opportunity Credit. My expenses are easily high enough (over $10,000) for the maximum amount of $2,500. Now, I understand that a maximum of $1,000 is refundable. However, I'm not at this limit; my federal refund is only $399, so I should be able to get an additional $601. Is there some obvious bit of math I'm missing? Thanks!

[Hal_Al]

Q.  Is there some obvious bit of math I'm missing?

A.  Yes*.  You should not be getting an additional $601. 

If your  AOTC is only $1226 and you have enough expenses for the full $2500, the usual explanation would be the $1000 (refundable) is on line 29 of form 1040 and the $226 is included on line 20 because that's all it takes to get your tax to 0.  If line 20 is something other than $226, you have other credits from Schedule 3. The non refundable  AOTC amount is on line 3 of Schedule 3. 

*For details, you may have to see the Credit Limit Worksheet for line 19 of form 8863 for the calculation of the non refundable part (and that's a complicated bit of math). 

[robintruax]

Got it. Thanks for the help!