Qualifying years for AOC

[Lion]

Sorry, Burke threw in a question in response to your question, so I was answering Burke. I guess we have two threads tangled together.

An undergraduate can use AOC four times during his college years, including his final year which might be one semester only. It does not matter whether the rest of the year is work or graduate school or home living with his parents or backpacking through Europe.

It's the graduate student, with no undergraduate semester during that tax year, who cannot use the AOC. Or, anyone who already used the AOC four times.

Sorry for the confusion. I compounded it by answering something other than the OP's question.

[Lion]

I have a client who has completed 4 years of college,...took college graduate classes in 2019 here. At-least-half-time-box is checked. He should qualify for a credit. My software will not allow AOTC as he "has completed 4 years of post-secondary school prior to 2019." Is this correct? LLC processes just fine, but it is $1K difference since it is not refundable.

Graduate students do not qualify for AOC.

[Lion]

You said he's a graduate student, so he's limited to LLC, probably.

[Burke]

I have a client who has completed 4 years of college, but it was back in 2008. Before AOTC/HOPE or anything else, so he did not take any credits. Besides, it was in another country. He is in the US Army, a US resident, and took college graduate classes in 2019 here. At-least-half-time-box is checked. He should qualify for a credit. My software will not allow AOTC as he "has completed 4 years of post-secondary school prior to 2019." Is this correct? LLC processes just fine, but it is $1K difference since it is not refundable.

[Lion]

Then take AOC or T&F, whichever gives the best result overall for federal and state.

[rbynaker]

Four tax returns. So if you used it in years 1, 2 and 3 but didn't qualify in year 4, there's still one more available (as long as the student is still an undergraduate).

IRC 25A(b)(2)(A):

https://www.law.cornell.edu/uscode/text/26/25A

"An election to have this section apply with respect to any eligible student for purposes of the American Opportunity Tax Credit under subsection (a)(1) may not be made for any taxable year if such an election (by the taxpayer or any other individual) is in effect with respect to such student for any 4 prior taxable years."

Rick

[Lion]

Don't forget the T&F returned for both 2018 and 2019 and has higher income phase-outs than AOC. But, to answer your question, you cannot have used the AOC for four years. Most kids are undergraduates for part of five calendar years. Usually LLC for first or last and AOC for four. That's my sleep-deprived memory, so go to the code to check.

[FEDUKE404]

Never mind.