A blog post

There Is a New College Credit

Posted on the 05 November, 2009 at 10:50 pm Written by in Taxes

There is a new college credit: the American Opportunity tax credit. Unlike the Hope credit that it temporarily replaces for 2009 and 2010, the American Opportunity credit is available for the first four years of college education. It is worth up to $2,500 and up to 40% of the credit is refundable.  Tuition of course qualifies. Now related fees, books and other required course materials also (generally) qualify. This credit is available for single taxpayers with less than $80,000 of modified AGI and married couples with less than $160,000.

While 2009 is the first year for the American Opportunity credit, 2009 will be the last year for the tuition deduction. This deduction is not limited to undergraduate courses. Thus graduate students, people taking undergraduate classes beyond four-years, and people taking occasional classes will take to review the tuition deduction versus the Lifetime Learning tax credit. Both the tuition deduction and Lifetime Learning credit are based only on tuition expenses.