What is the American Opportunity Tax Credit?

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Paul Wannemacher, Resident Financial Planner

@PaulWannemacher • 03/28/16 This answer was first published on 03/28/16. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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This recently renewed credit is for qualified education expenses for the 1st 4 years of college paid for an eligible student up to a max of $2,500 per student per year. The credit phases out for taxpayers above certain income thresholds (MAGI of $90K single, $180K joint) and the full credit is available if your MAGI is under $80K single, $160K joint. To be considered an eligibl student, you need to enrolled at least half-time for one academic period this tax year. The AOTC is available up to 4 times per student.

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