The American Opportunity Credit.
- The American Opportunity Credit applies only to the first four years of post-secondary school education (university, college, vocational school, nonprofit and for-profit institutions)
- You can claim up to $2,500 per eligible student, per year.
- The credit covers 100% of the first $2,000 of qualified tuition, required fees, and qualified expenses, plus 25% of the next $2,000.
- 40% of the credit is refundable, so you may receive $1,000 per eligible student as a tax refund even if you owe no tax.
- Each student for which you claim the credit must have been enrolled at least half-time for at least one academic period which began during the 2020 Tax Year when filing in 2021.
- For Tax Year 2020, the limit on modified adjusted gross income (MAGI) is $180,000 if Married Filing Jointly and $90,000 if Single, Head Of Household, or Qualifying Widow(er). ($160,000 and $80,000 for Tax Year 2018, which can be claimed if a tax amendment is filed). This means you can not claim the credit if your MAGI is over $90,000 ($180,000 for Married Filing Jointly). Not sure what your filing status is? Use the eFile.com STATucator tool to determine your status by answering a few simple questions.
- You may claim the credit for education expenses you paid for yourself, your spouse, or your dependent. You may not take the credit for yourself if you are claimed as someone else's dependent.
- Qualified expenses include tuition and required fees, books, supplies, equipment, and other required course materials (but not room and board).
- Any felony drug convictions by the end of the tax year disqualify the student from receiving the American Opportunity Credit.
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