age of student for the american opportunity credit
Eligible students for the American opportunity tax credit. An eligible student is a person who has not completed four years of schooling, enrolls in at least one academic semester during the applicable tax year and maintains at least half-time status in a program leading to a degree or other credential. American Opportunity Tax Credit. Students may claim this credit if you are over age 24 as long as you meet the other requirements, e.g. are not claimed as a dependent on someone else return, are attending a degree program half-time or more, and have not already completed four years of college. If you don't meet these criteria, you will probably be eligible for the Lifetime Learning Credit (see below). The American Opportunity credit is phased out for single taxpayers with incomes between $80,000 and $90,000, or ($160,000 to $180,000 for married joint filers). You must be attending a degree program at least half time during your first four years of college. Furthermore, you can’t claim more than one tax benefit per year for each student. The credit amount is equal to 100 percent of the first $2,000 of qualified expenses plus 25 percent the expenses in excess of $2,000. However, the maximum annual credit per student is $2,500. Say your American Opportunity credit is $2,500. The refundable portion is $1,000 ($2,500 x 40%). That amount is treated as a payment on your tax return (as if you had the $1,000 withheld from your wages). President Obama wanted to make college affordable for everyone. As part of the American Recovery and Reinvestment Act of 2009, the American Opportunity Credit provides up to $2,500 for each eligible college student per year. 40% of this is a refundable credit, meaning you can receive $1,000 even if you owe no taxes. If you have several students in your family, you can claim multiple credits based on the expenses of each student. For example, if you have three kids in college, you can claim up to $7,500 ($2,500 x 3) in American Opportunity credits. The credit is not allowed for a student who has four or more years’ worth of college credits as of the beginning of the year. OVERVIEW. The American opportunity credit allows taxpaying students the opportunity to settle the cost of attending college. The credit offers greater tax savings than a tuition deduction since it reduces the tax you owe on a dollar-for-dollar basis rather than just reducing the amount of income subject to tax. (to determine if eligible, see http://ope.ed.gov/accreditation) • The eligible student is either the taxpayer, taxpayer’s spouse or a dependent for whom the taxpayer claims an exemption on the tax return. The American Opportunity credit covers up to $2,500 of undergraduate costs. In 2009, Congress replaced the well-known Hope Scholarship credit with the more generous American Opportunity credit. The new credit is currently available through 2017. The American Opportunity credit equals 100% of the first $2,000 of a student’s qualified education expenses plus 25% of the next $2,000. The maximum annual credit is $2,500.
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