Overlooked Credits

American Opportunity Credit

The American Opportunity Credit is a credit of up to $2,500 for education expenses for the taxapayer, their spouse, and any dependents who attended a college or trade school for half-time or more during the year.  Students must also be in their first four years of their education, be enrolled in a program that is expected to provide a degree or certificate, and they must be free of any drug convictions.

The credit is basedon 100% of the first $2,000 paid in tuition and required fees and materials and 25% of the next $2,000.  In addition, 40% of the credit, up to $1,000, is a refundable credit and the balance is a nonrefundable credit.

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