Planning for the American Opportunity Tax Credit
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.