Unlike the Lifetime Learning Credit or the Hope credit, the American Opportunity credit expands the definition of qualifying educational expenses. In addition to tuition and required school fees, students can also include the cost of course materials such as books, lab supplies, software and other class materials are part of their tax credit calculations. Students should keep receipts for their tuition, books, and other course materials as supporting documentation.
By my calculations, undergraduate students earning up to $30,466 would have zero taxes through a combination of the American Opportunity credit of $2,500 and the Making Work Pay credit of $400. Students earning below this amount may have refundable credits, meaning that their refund could potentially be larger than the amount of withholding they paid in.
No where have I found the requirement that the student must be claimed as a dependant of the taxpayer taking this new “American Opp. Tax Credit”.
So, can a Grandparent pay $2000 of qualified expenses, AND the Parents pay $2000 of qualified expenses of the SAME student yet both file for the tax credit?
I do see on the Draft version of form 8863 that the student’s name and SSN must be stated, but that in itself does not answer the question above
If you have 2 kids in college, is the $1000 limit on the refundable amount available for each student or is it a total of $1000 for the taxpayor.
When receiving a scholarship or grant, it will most of the time be beneficial to be able to spend those for non-qualifying expenses and go ahead and pay the income taxes on the scholarship or grant at the very low rates of the student. The parents will then be able to claim the full credit on their returns. This strategy is most beneficial at public junior colleges, where a years tuition and fees are almost equal to the credit.
I received financial aid. Do I qualify and how do I report my financial aid on my taxes. My financial aid was all grants. Please help.
What documentation is required for the “related course materials?”
Receipts for the actual course materials. Plus syllabi for each course showing which books, materials or software are required for the course.
can a student who support themself and their baby get the American opportunity credit and the child tax credit?
Do you have to have earned income to receive the refundable portion of the American Opportunity Credit?