Can I claim the American Opportunity Credit toward my second Bachelor's if I have already earned one from Europe (didn't use the American Opport Credit for this one)?

[stocki1]

Is the fact that I have completed a degree in a foreign institution (which is not listed here: https://fafsa.ed.gov/FAFSA/app/schoolSearch) a qualifying factor for the credit. Also, I am not transferring credits from the first Bachelor's toward the current one.

[MinhT1]

No, you are not eligible for the AOTC if you have completed four or more years of post-secondary at the beginning of 2020.

To be eligible for AOTC, the student must:

• Be pursuing a degree or other recognized education credential
• Be enrolled at least half time for at least one academic period beginning in the tax year
• Not have finished the first four years of higher education at the beginning of the tax year
• Not have claimed the AOTC or the former Hope credit for more than four tax years
• Not have a felony drug conviction at the end of the tax year

It does not say that the four years of post-secondary education have to be in the US. So if you have completed four or more years of post-secondary education anywhere, then you are ineligible for the AOTC.

[stocki1]

Thank you for the clarification.

I believe I used the AOTC for my freshman year; if we accept that I was not eligible, should I file Form 1040-X to amend a tax return? Also, doesn't the IRS check if the person is eligible for the AOTC?

Thank you very much for your time and help!

[Opus 17]

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@stocki1 wrote:

Thank you for the clarification.

I believe I used the AOTC for my freshman year; if we accept that I was not eligible, should I file Form 1040-X to amend a tax return? Also, doesn't the IRS check if the person is eligible for the AOTC?

Thank you very much for your time and help!

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The income tax system is mostly run on the honor system and most taxpayers are never audited.  Plus, your current school is not required to tell the IRS that you have a previous undergraduate degree.  As far as they are concerned, if you are enrolled in an undergraduate program, that's what they will report.

You are indeed ineligible if you have had 4 years of post-secondary education, or received a 4 year degree even if you got it in less than 4 years, even if the degree was awarded outside the US.  See page 18 here,

https://www.irs.gov/pub/irs-pdf/p970.pdf

You should file an amended return to pay back the credit you were ineligible for.  If you don't, the IRS has 3 years to audit you for routine mistakes, and 6 years if they allege deliberate fraud, or your mistake resulted in a mis-statement of the tax you owed that was more than 25% under what you should have owed. 

[KathrynG3]

Yes, if the American Opportunity Tax Credit was claimed in error, to avoid penalties and interest, amend the return as soon as possible.

For instructions on how to do this, see: How do I amend my 2020 TurboTax Online return? Keep in mind, Form 1040-X will not be available for a few more weeks.

However, when it is available, you will still be able to e-file the 2020 amended tax return. Depending on your state of residence, the state return may need to be paper filed. Only Georgia, New York, Michigan and Vermont provide e-filing for amended returns.

[stocki1]

Thank you very much for the detailed information. I will definitely check on my taxes from last year for AOTC.

[stocki1]

Thank you for the information and the links with instructions and Form 1040-X.