As long as you are eligible for the credit, go ahead and take the credit. The only way you would ever be required to pay any of the credit back is if the IRS audited your return and determined that you were not entitled to take the credit.
The requirements for the American Opportunity Credit are as follows:
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:
- The student must be you, your spouse, or a child whom you claim as a dependent on your tax return.
- The credit can only be claimed for the first four years of post-secondary education.
- The student must be pursuing a degree, certificate, or other recognized credential at an Eligible Educational Institution.
- The credit is only available for four tax years.
- The student must be enrolled at least half-time for a minimum of one academic period during the tax year.
- The academic period must begin either during 2016 or during the first three months of 2017.
- You must pay the expenses during 2016 or during the first three months of 2014.
- 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.
- 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.
- 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.
- 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.
- You cannot claim the credit if you are filing using the married filing separate filing status.
- 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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