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.

Read more about American Opportunity Tax Credit:  History

Famous quotes containing the words american, opportunity, tax and/or credit:

    “The establishment of democracy on the American continent was scarcely as radical a break with the past as was the necessity, which Americans faced, of broadening this concept to include black men.”
    —James Baldwin (1924–1987)

    “Open the doors of opportunity to talent and virtue and they will do themselves justice, and property will not be in bad hands.”
    —Ralph Waldo Emerson (1803–1882)

    “If you tax too high, the revenue will yield nothing.”
    —Ralph Waldo Emerson (1803–1882)

    “It is probable that the principal credit of miracles, visions, enchantments, and such extraordinary occurrences comes from the power of imagination, acting principally upon the minds of the common people, which are softer.”
    —Michel de Montaigne (1533–1592)