American Opportunity Credit

Tax

The American Opportunity Credit provides up to $2,500 per student per year for the first four years of college. Calculated as 100% of first $2,000 in qualified expenses + 25% of next $2,000. Up to $1,000 is refundable. MAGI phase-out: $80,000-$90,000 single / $160,000-$180,000 married joint. Qualified expenses include tuition, required fees, and course materials (not room and board). The student must be enrolled at least half-time, pursuing a degree, not have completed 4 years of postsecondary education, and have no felony drug convictions. Coordinate with 529 plan withdrawals — can't double-dip on the same expenses.