It looks to me like most students can only claim AOTC for 3 and a half years of education.
Form 8863 asks: "Has the Hope Scholarship Credit or American opportunity credit been claimed for this student for any 4 tax years before 2020?" So you only get to claim AOTC on 4 tax filings.
For most students, that looks like:
- year 1: fall of freshman
- year 2: spring of freshman + fall of sophomore
- year 3: spring of sophomore + fall of junior
- year 4: spring of junior + fall of senior
- NO AOTC: year 5: spring of senior
Am I missing something ?
It is too late now for my oldest child, who will be taking 4 and a half years, but for my younger child, it seems to me like it would be wise to skip taking AOTC in year 1. If he completes in 4 academic years, I still get 3.5 years of AOTC because I'll claim it in the spring of his senior year. If he takes 4.5 or even 5 years, I'll get 4 years of AOTC. In the unlikely case he finishes early, in 3 and a half years, I'll celebrate because he finished early, even though I only claimed AOTC on 3 years.
Assuming, of course, that the AOTC exists that long.
If you expect your child to take 4 or more years to finish college, is it financially wise to skip AOTC that first year?
