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New Member

Didn't qualify for the American Opportunity Credit

I've read all of the requirements to qualify and I should be eligible. I took 9 hours of semester credit which makes me at least half-time
1 Reply
New Member

Didn't qualify for the American Opportunity Credit

Without having the ability to access your information, I can think of a couple of common reasons why you may, unexpectedly, not qualify for the American Opportunity Tax Credit.

One of the biggest issues for many students, is that their parents are claiming them as dependents. Under IRS rules, the American Opportunity Tax Credit is attached to the student’s exemption. If you are filing for yourself, you can claim the credit - otherwise you cannot claim the credit. Technically, parents or guardians are often able to claim student children until they are the age of 24 years old if the student is unmarried. If this is the case, and you marked that "someone else can claim me as a dependent" in the program, TurboTax will show that you do not qualify for the tax credit. I recommend reviewing these rules (Pub 501 regarding Dependents) to make sure whether you or your parents can claim your tax exemption.

The other issue that commonly prevents students from claiming the credit is that they have received more money in scholarships and grants (listed on the form 1098-T from your school) than qualified education expenses (including expenses listed on this IRS site and tuition and fees listed on the form 1098-T from your school). Make sure you have included all other education expenses like books,supplies and equipment in the expenses that you have included in TurboTax.

Here is a full list of all qualifications for the American Opportunity Credit. If the above paragraphs do not describe your situation, you may not qualify because of any of these other items:

  1. The student must be you, your spouse, or a child whom you claim as a dependent on your tax return.

  2. The credit can only be claimed for the first four years of post-secondary education.

  3. The student must be pursuing a degree, certificate, or other recognized credential at an Eligible Educational Institution.

  4. The credit is only available for four tax years.

  5. The student must be enrolled at least half-time for a minimum of one academic period during the tax year.

  6. The academic period must begin either during 2016 or during the first three months of 2017.

  7. You must pay the expenses during 2016 or during the first three months of 2014.

  8. You can pay expenses with a loan, including low-interest student and government subsidized loans, but be sure to deduct the expenses rather than the loan payments.

  9. Qualified education expenses include tuition and "course materials." For this purpose, the term "course materials" means books, supplies, and equipment needed for a course of study whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance.

  10. Courses must be taken at an eligible educational institution. Check with your school to see if they are eligible to participate in a student aid program administered by the Department of Education.

  11. You can't claim the credit if you are claimed as a dependent on your parent's (or someone else's return). This credit is attached to the student's exemption. If you are filing for yourself, you can claim the credit - otherwise you can not.

  12. You cannot claim the credit if you are filing using the married filing separate filing status.

  13. Your Modified AGI (income) should be under 90,000 dollars, or under 180,000 dollars if you are filing as married filing jointly.

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