The American Opportunity Tax Credit (AOTC) provides great financial help each year to those households in the United States that have college students. Although this is not as popular as the Child Tax Credit, it does allow multiple households to receive up to $2,500.00 USD annually for each qualifying student.
In this sense, it can be applied to essential expenses such as registration, registration fees and course materials.
What are the requirements to qualify for the AOTC?
Firstly, you are only allowed to claim one educational credit per student per year. That is, a single taxpayer can claim the student in question to receive financial aid.
Additionally, income must be less than $180,000.00 USD when filing a joint return. Likewise, if they are single, head of household or qualified widowers, their income must be less than $90.00 USD.
It is very important here that the student follows a program that leads to a degree or a recognized educational credential. Therefore, the AOTC is available for the first four years of post-secondary education.
Furthermore, they must have been enrolled at least half the time during the fiscal year. Furthermore, they should not have been convicted of a serious crime, including possession or distribution of a controlled substance.
The credit can also be claimed for qualified education expenses. This includes tuition paid to accredited public, nonprofit, or private colleges, universities, vocational schools, or other postsecondary educational institutions.
Another good news is that it also includes registration fees and the materials necessary to take the courses.
But, it is important that the institution involved participate in a student aid program with the United States Department of Education.
Likewise, the way to receive the maximum available amount of $2500.00 USD per student may vary depending on the calculations.
Finally, the first $2000.00 USD of educational expenses paid by each eligible student will be able to receive 100% of that amount.
