(AOTC) American Opportunity Tax Credit

The American Opportunity Tax Credit (AOTC) is a tax credit that encourages individuals to take advantage of opportunities in the United States.

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What is (AOTC) American Opportunity Tax Credit?

The American Opportunity Tax Credit is a tax credit that can be used to defray the costs of college for the first four years after high school. A maximum credit of $2,500 per year is available.

If you are a qualified student, you could be eligible for a refund of 40% of your tuition, up to $1,000, if you do not owe any taxes. This credit is conditional on your ability to pay it back.

Constrains

The American Opportunity Tax Credit (AOTC) is open to anyone who qualifies.

Who is eligible for (AOTC) American Opportunity Tax Credit?

The student must meet the following conditions to be qualified for AOTC:

  • If you, your partner, or a dependent on your tax return,
  • Pursue a bachelor’s degree or any recognised educational credential
  • Expenses for qualified education at a qualified educational institution
  • Start the tax year by enrolling in at least half-time classes for at least one academic period*.
  • At the start of the tax year, you had not completed the first four years of higher education.
  • For the past four tax years, you haven’t claimed the AOTC or the former Hope allowance.
  • At the end of the tax year, you would not have received a criminal drug sentence.

 

How do I apply for (AOTC) American Opportunity Tax Credit?

You must file a federal tax return, complete Form 8863, and apply it to your Form 1040 or Form 1040A to be eligible for the AOTC.

Use the data from the student’s Form 1098-T Tuition Statement. Payments collected, sums billed or refunds made for tuition and related expenditures, scholarships administered by the college, and the student’s enrollment and graduation status are all included on the form.

How can I contact someone?

Visit the American Opportunity Tax Credit website for more details.

 

If you aren’t eligible for the AOTC, go to the Tax Benefits for Education: Information Center page to see if you qualify for another education benefit.