American Opportunity Tax Credit Eligibility

[dk1027]

I began college in 2019 and have been enrolled in college since because I switched majors and kind of had to start from square one. So I am technically in my 6th year of school but I have not received a bachelor’s degree, nor do I have enough credits (120) to even be considered a bachelor’s degree holder. I have only claimed the American Opportunity Tax Credit twice. Am I eligible to claim it for 2024 even though I am in my sixth year of school? 

Claiming the American Opportunity Tax Credit / Florida Prepaid 

[Bsch4477]

Yes. 

[Opus 17]

Maybe not.  You must be within the first 4 years, AND not have claimed it 4 times.  The ATOC is designed around the assumption of a traditional 4 year degrees, not for people who noodle around.  See #1 below.

The important question is, does your institution consider you to be in year 4 or less, or year 5 or higher?  For example, if you took less than a full course load in some years, the school might consider you a 3rd or 4th year student even though you have taken classes over 6 calendar years.  

If you are considered a 5th or 6th year student, you can still claim the Lifetime Learning credit but not the AOTC. 

Student qualifications.

Generally, you can claim the American opportunity credit for a student only if all of the following four requirements are met.

1. As of the beginning of 2023, the student had not completed the first 4 years of postsecondary education (generally, the freshman through senior years of college), as determined by the eligible educational institution. For this purpose, don't include academic credit awarded solely because of the student's performance on proficiency examinations.

2. The American opportunity credit has not been claimed by you or anyone else (see below) for this student for any 4 tax years before 2023. If the American opportunity credit has been claimed for this student for any 3 or fewer tax years before 2023, this requirement is met.

3. For at least one academic period beginning (or treated as beginning) in 2023, the student both:

   1. Was enrolled in a program that leads to a degree, certificate, or other recognized educational credential; and

   2. Carried at least one-half the normal full-time workload for their course of study.

      The standard for what is half of the normal full-time workload is determined by each eligible educational institution. However, the standard may not be lower than any of those established by the U.S. Department of Education under the Higher Education Act of 1965.

      For 2023, treat an academic period beginning in the first 3 months of 2024 as if it began in 2023 if qualified education expenses for the student were paid in 2023 for that academic period. See Prepaid expenses, later.

4. As of the end of 2023, the student had not been convicted of a federal or state felony for possessing or distributing a controlled substance.

https://www.irs.gov/publications/p970#en_US_2023_publink1000204325