American Opportunity Credit

[michaelscottpc]

Is there a minimum amount of income needed to claim the full 2500 for the American Opportunity Credit?  My son paid over 5000 in tuition last year and Turbo tax only calculated about a $730 credit.  The only thing I can think of is maybe he does not have enough income?  He has about $23000 of income before taking the standard deduction.  Thanks for any help.

[DavidD66]

It is income dependent, but there are multiple factors that determine the amount of the credit.  For instance, 40% of credit may be refundable; the rest is nonrefundable, which means that part of the credit is limited to the amount of tax you must pay on your taxable income.  The refundable is not contingent on your tax amount.  Unlike the upper income limits which are pretty simple, there isn't a "minimum income" in order to qualify for the full $2,500.  For more information see the following:  

What Is the American Opportunity Tax Credit?  

IRS Publication 970 Tax Benefits for Education