Indiana College Costs Estimator

American Opportunity Credit

Temporary tax credit for tax years 2009 and 2010 created by federal stimulus legislation which replaced the Hope Credit for most taxpayers. The American Opportunity Tax Credit, which was to expire at the end of 2012, was extended through December 2017 by the American Taxpayer Relief Act of 2012.

The American Opportunity Credit is more generous than the Hope Credit and is partially refundable (up to $1,000). The credit, worth up to $2,500 per student in 2010, can be claimed for 100% of the first $2,000 in qualified higher education expenses and 25% of the next $2,000 in college costs. 

A taxpayer whose modified adjusted gross income is $80,000 or less ($160,000 or less for joint filers) can claim the credit for the qualified expenses of an eligible student. The credit is reduced if a taxpayer’s modified adjusted gross income exceeds those amounts. A taxpayer whose modified adjusted gross income is greater than $90,000 ($180,000 for joint filers) cannot claim the credit.

The student must also be enrolled at least half-time, be pursuing an undergraduate degree or other recognized academic credential, and is only available for the first four years of post-secondary education.  

Refer to the IRS website for a list of FAQ's concerning the American Opportunity Tax Credit

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