American Opportunity Credit

[AccTaxMan]

Taxpayer's daughter was a 5th year senior in 2010.

She has claimed 4 years of education credit before.

2006 - Hope Credit
2007 - Hope Credit
2008 - Lifetime Learning Credit
2009: American Opportunity Credit.

Does she qualify for American Opportunity Credit in 2010?

[dtlee]

From my understanding of your post, yes.

As long as she did not complete the first four years of postsecondary education by the start of the year, was enrolled at least half time during at least one academic period, and has not been convected of a drug felony, it sounds like she would be eligible. (normal rules apply....can't use the tuition & fees deduction or Lifetime Learning credit for the same student, etc.)

[AccTaxMan]

From my understanding of your post, yes.

As long as she did not complete the first four years of postsecondary education by the start of the year, was enrolled at least half time during at least one academic period, and has not been convected of a drug felony, it sounds like she would be eligible. (normal rules apply....can't use the tuition & fees deduction or Lifetime Learning credit for the same student, etc.)

What about the fact that she has claimed 2 years of Hope Credit and 1 year of American Opportunity Credit (and 1 year of Lifetime Learning Credit) before?

[travis bickle]

Should not be a problem

What about the fact that she has claimed 2 years of Hope Credit and 1 year of American Opportunity Credit (and 1 year of Lifetime Learning Credit) before?

This paragraph is from the IRS website -

The American Opportunity Credit is not available on the 2008 returns taxpayers are filing during 2009. The new credit modifies the existing Hope Credit for tax years 2009 and 2010, making the Hope Credit available to a broader range of taxpayers, including many with higher incomes and those who owe no tax. It also adds required course materials to the list of qualifying expenses and allows the credit to be claimed for four post-secondary education years instead of two. Many of those eligible will qualify for the maximum annual credit of $2,500 per student emphasis added

So, the purpose of the AOC is to expand the HOPE credit to a four-year program. Since the student in question has only claimed three years worth, this would be the last year available [provided other rules - MAGI, etc - are met].

[dtlee]

What about the fact that she has claimed 2 years of Hope Credit and 1 year of American Opportunity Credit (and 1 year of Lifetime Learning Credit) before?

This uses 3 of the allowed 4 years (the 1 year of Lifetime Learning does not count against the American Opportunity Credit).

[Burke]

The AOC was only an expansion of the Hope Credit. The problem is that Congress re-named it, a stupid thing to do, which is simply confusing. Their intention was to keep it available to only the first four years of higher education (college). However, there could be overlap, in that the school year runs from Aug-Sept through May of the following year. So conceivably, there could be five tax returns on which the credit could appear. I am cautioning all my parents of college-age children to NOT prepay that last semester in the previous year, for this reason.

[dtlee]

AOC/Hope Credit

Burke,

I agree with your post, but just to confirm what you said and to clarify a bit....

Assuming a normal four year education with a normal academic calendar, the credit could be claimed on five tax returns, with the caveat that the student is only able to actually claim this credit four times during those five years (and so, must decide which four of those five years to use it in).