The American Opportunity tax credit was previously called the Hope Credit. In 2009, Congress replaced the well-known Hope credit with the more generous American Opportunity credit. Since you have already taken the American Opportunity Credit for the past 4 years you are not eligible for the credit this year.
You may qualify for the Lifetime Learning Credit, and there is no limit on the number of years that can be claimed for each student so it is also available to graduate students.
You are eligible to claim the Lifetime Learning Credit if all of the following requirements are met:
- You (or your dependent or a third party) paid qualified education expenses for higher education.
- You paid the education expenses for an eligible student.
- The eligible student is you, your spouse, or a dependent you claim an exemption for on your tax return.
Your modified adjusted gross income is less than $65,000($130,000 if you are married filing jointly).
The credit is reduced between $55,000 and $65,000 ($110,000 and $130,000).
Generally, if you paid for qualified education expenses for an academic period beginning in the year or in the first three months of the next year then you are allowed to take the Lifetime Learning Credit.
Qualified expenses are tuition and certain related expenses required for enrollment at an eligible institution. The course must be either part of a post secondary degree program or taken by the student to acquire or improve job skills.
Student activity fees and expenses for course-related books, supplies, and equipment are included in qualified education expenses only if the fees and expenses are paid to the institution as a condition of enrollment or attendance.
Note: the maximum Lifetime Learning Credit you can claim in a year is 20% of the first $10,000 of qualified education expenses you paid for all eligible students (or up to $2,000). The credit is reduced (phased out) if your modified adjusted gross income (MAGI) is between $55,000 and $65,000 ($110,000 to $130,000 if married filing jointly). Since this is not a refundable credit, the credit can't be more than your tax liability.