American Opportunity Tax Credit
Work out your American opportunity tax credit: up to $2,500 per student, the refundable $1,000, the income phase-out, what counts as qualified expenses, and how it compares with the lifetime learning credit.
American opportunity tax credit calculator
How the American opportunity tax credit works
The AOTC is worth up to $2,500 per eligible student a year: 100% of the first $2,000 of qualified education expenses plus 25% of the next $2,000. Up to 40% of it (as much as $1,000) is refundable, so you can get it back even if you owe no tax. It's available for the first four years of college for a student enrolled at least half time in a degree program.
Income limits (not adjusted for inflation)
The credit phases out between $80,000 and $90,000 of modified AGI ($160,000 to $180,000 married filing jointly). Married couples filing separately can't claim it. Example: $4,000 of tuition with MAGI of $70,000 gives the full $2,500; at $85,000 it's cut to $1,250.
What counts as qualified expenses
Tuition, required fees and course materials (books, supplies and equipment needed for courses). Room and board, insurance, transportation and medical expenses don't count. Expenses paid with tax-free scholarships or grants can't be used. You'll need Form 1098-T from the school and Form 8863 with your return.
When the other education credit fits better
The lifetime learning credit is 20% of up to $10,000 of expenses (maximum $2,000 per return), isn't refundable and has no four-year limit, so it suits graduate school and courses after the first four years. You can't claim both for the same student in the same year. For your whole refund, use the tax refund estimator.
Common questions
How much is the American opportunity tax credit?
Up to $2,500 per eligible student per year; up to $1,000 of it is refundable.
What are the AOTC income limits?
It phases out between $80,000 and $90,000 of modified AGI, or $160,000 to $180,000 for joint filers; married filing separately can't claim it.
How many years can I claim the AOTC?
Four tax years per eligible student, for the first four years of postsecondary education.
Does room and board count for the AOTC?
No. Only tuition, required fees and course materials count.
Sources
More paycheck and tax calculators: 5498 Tax Form · Amended Tax Return (1040-X) · Blank W9 Form · Child Tax Credit
Related
- Tax refund estimator
- 529 calculator
- Married filing jointly: taxable income calculator
- Student loan payback calculator
General information, not financial, tax or legal advice. Check important numbers with the official source before acting on them.