All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Pioneer
Posts: 1
Registered: ‎01-31-2018
Accepted Solution

American Opportunity Credit Question

Sorry if this has already been asked.  I searched but didn't find this specific scenario, though it's possible I missed it.

 

My wife went received undergraduate and graduate degrees from 2001-2006, which best I can tell is before this credit existed.  She has since decided to change careers and is finishing up her RN degree at our local community college.  I am just guessing she is NOT eligible for the American opportunity Credit, but is anyone with more knowledge able to confirm that?  I have seen conflicting information online, so I don't want to completely rule it out without folks who know more than me.

 

Thanks in advance and happy filing!

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Associate (Pioneer)
Posts: 49
Registered: ‎01-08-2018

Re: American Opportunity Credit Question

Hi Nolonger_superm,

 

Welcome to the community!

 

Regarding the American Opportunity Credit for your wife, I would suggest that your wife review her tax returns for past years when she went for undergraduate and graduate degrees from 2001-2006 to see if she ever claimed the Hope Scholarship credit in the past. The American opportunity tax credit is the expanded and renamed already-existing Hope scholarship credit. The Hope scholarship credit originally applied only to the first two years of college while the American opportunity tax credit can be claimed for expenses for the first four years of post-secondary education.

 

According to IRS’s instruction regarding eligible student for AOTC, to be eligible for AOTC, the student must:

  • Be pursuing a degree or other recognized education credential
  • Be enrolled at least half time for at least one academic period beginning in the tax year
  • Not have finished the first four years of higher education at the beginning of the tax year
  • Not have claimed the AOTC or the former Hope credit for more than four tax years
  • Not have a felony drug conviction at the end of the tax year

In your case, if your wife already finished her first four years of undergraduate education (such as the completion of a bachelor's degree), then she would not be an eligible student for AOTC, but your wife might qualify for the Lifetime Learning Credit.

 

The Lifetime Learning Credit (LLC) is for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution. This credit can help pay for undergraduate, graduate and professional degree courses. There is no limit on the number of years you can claim the credit. It is worth up to $2,000 per tax return. This is link from IRS for your reference https://www.irs.gov/credits-deductions/individuals/llc

 

Hope this helps you out & please ask if you have any other questions.

 

HienN.

Tax Research Specialist.

The Tax Institute at H&R Block.