American Opportunity Credit

American Opportunity Credit

A tax credit in the United States making a dollar-for-dollar reduction in the tax liability of a postsecondary student equivalent to 100% of tuition and education fees, up to $2,500. Up to 40% of the credit is a refundable tax credit. Certain income limits apply to a student's eligibility. It was instituted in 2009 and is scheduled to expire in 2012.
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Among the others: the lifetime learning credit or the American Opportunity Credit.
There are two types of credits: the American Opportunity Credit, which is available through 2017 and is limited to the first four years of post-secondary education, and the Lifetime Learning Credit which provides credit for years after the first four years of post-secondary schooling and can be used for graduate studies.
The Complaint alleges that H&R Block erroneously and negligently filled out and transmitted IRS Form 8863, which is used to claim educational tax credits (the American Opportunity Credit and the Lifetime Learning Credit), leaving a mandatory field blank.
The Lifetime Learning Credit and the American Opportunity Credit, which is for degree or certificate programs only but allows up to $2,500 per student, per year, for the first four years of undergraduate school, cannot be claimed by the same person.
Current refundable tax credits for individuals include the additional child credit, the earned income credit, the health coverage credit, and the American opportunity credit.
Students who attended school at least half time in 2012 may be eligible for the American Opportunity Credit that can amount to $2500.
In contrast, several tax credits intended for low-income families -- such as the Child Tax Credit, the Earned Income Tax Credit and the American Opportunity Credit -- were only extended for five years until 2017, something Greenstein described as "appalling.
Education credits such as the American Opportunity credit cover the first $2,000 of tuition and related costs and 25 percent of the next $2,000 of expenses.
You may qualify for the American Opportunity Credit of up to $2,500 if you spent at least $4,000 on college tuition and qualified expenses (including fees, books and related course materials) this past year.
The new American Opportunity Credit, part of the economic stimulus effort, allows a tax credit of up to $2,500 for each qualifying student in a family for the first four years of college.
Taxpayers will be able to address economic hardship issues, make payment arrangements or get help claiming special tax breaks in last year's American Recovery and Reinvestment Act, including the homebuyer tax credit, American Opportunity credit, Making Work Pay credit and expanded earned income tax credit.
Given that the American opportunity credit is now available for the third and fourth years of college, it is possible.

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