American Opportunity Tax Credit

The American Opportunity Tax Credit is a partially refundable tax credit detailed in Section 1004 of the American Recovery and Reinvestment Act of 2009.

The act specifies:

  1. Provisions are specific to tax years 2009 and 2010 (since extended through 2017) for the first 4 years of post-secondary education.
  2. Increases the Hope Scholarship Credit to 100 percent qualified tuition, fees and course materials paid by the taxpayer during the taxable year not to exceed $2,000, plus 25 percent of the next $2000 in qualified tuition, fees and course materials. The total credit does not exceed $2500.
  3. 40% of the credit is refundable.
  4. This tax credit is subject to a phase-out for taxpayers with adjusted gross income in excess of $80,000 ($160,000 for married couples filing jointly).

The act directs several Treasury studies:

  1. Coordination with non-tax student financial assistance;
  2. Coordinate the credit allowed under the Federal Pell Grant program to maximize their effectiveness at promoting college affordability;
  3. Examine ways to expedite the delivery of the tax credit;
  4. With the Secretary of Education, study the feasibility of requiring including community service as a condition of taking their tuition and related expenses into account.

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American Opportunity Tax Credit - History - H.R. 3296: Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
... The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Pub.L ... Among other things, the bill extends the American Opportunity Tax Credit for tax years 2011 and 2012 ...

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