American Opportunity Tax Credit (AOTC)
U.S. Department of the Treasury
What is American Opportunity Tax Credit (AOTC)?
The American Opportunity Tax Credit is a tax credit to help pay for education expenses paid for the first four years of education completed after high school. You can get a maximum annual credit of $2,500 per eligible student and 40% or $1,000 could be refunded if you owe no tax. This credit is subject to income limitations.
Administration
American Opportunity Tax Credit (AOTC) is administered by U.S. Department of the Treasury.
Program Requirements
To be eligible for AOTC, the student must:
- Be you, your spouse or your dependent that you listed on your tax return
- Be pursuing a degree or other recognized education credential
- Have qualified education expenses at an eligible educational institution
- Be enrolled at least half time for at least one academic period* beginning in the tax year
- Not have finished the first four years of higher education at the beginning of the tax year
- Not have claimed the AOTC or the former Hope credit for more than four tax years
- Not have a felony drug conviction at the end of the tax year
Application Details
What is the application process for American Opportunity Tax Credit (AOTC)?
To claim AOTC, you must file a federal tax return, complete the Form 8863 and attach the completed form to your Form 1040 or Form 1040A.
Use the information on the Form 1098-T Tuition Statement, received from the educational institution the student attended. The form includes the institution’s federal identification number, the student’s taxpayer identification number, payments received, amounts billed or refunds made for tuition and related expenses, scholarships administered by the institution, and the student’s enrollment and graduate status.