AOC again

[JG EA]

The student had not completed the first four years of postsecondary
education before the tax year.

Does this mean any part of 4 years?
e.g. A student in 2006 starts college takes a Hope Credit
In 2007 doesn't go
In 2008 goes T& E is taken
In 2009 goes AOC is taken
In 2010 goes but not 1/2 time LLC taken

Is the four years used up? It seems obvious that the student went for parts of 4 years, but one of the years is not half time. Does that matter?

[Gary2]

You're mixing up two different rules (that are inherently confusing, so it's not you).

One rule, which is the one you quoted, is strictly about the student's grade level. For example, one of my freshman roommates graduated in three years. Even though he never took Hope or AOC (they hadn't been invented), he still couldn't take it now, because receiving his Bachelor's degree is the equivalent of completing four years - regardless of how many actual years it took. (Remember that this rule applies as of the start of the tax year, e. g. Jan. 1, 2011 for most returns being prepared now.

For your example, this means asking how many credits the student has, without regard to how long it took to get them. More precisely, as of 1/1/2011, was the student considered a sophomore, junior, or senior? I'm inferring that the student didn't have enough credits to graduate, so for the AOC this is typically easy, but it's trickier for the Hope rules. Also, there could be unusual cases. For example, I'm not sure if a student who already has a one year certificate degree and then enrolls in a traditional four year program as a freshman (i. e., not getting any credit at the new school for the previous certificate) would be considered to have completed four years at the end of their third year at the new school.

The other rule is simply the number of tax years for which eIther the Hope or AOC has already been claimed for that student. So, for your example, the student clearly passes this test.

[Gretel]

Agreed. In a normal situation you have 5 potential calender years since college usually starts in fall. If it takes a student longer to graduate you might have more potential years.

Out of all these potential years, 4 years are allowed for AOC.

[JG EA]

Thank you both. I wanted to know if the 4 years meant 4 literal years. You both have answered that question for me.

I need to ask because although a seemingly simple credit - it has traps that I fall into.