🧠The American Opportunity Tax Credit (AOTC) provides more benefits than the Lifetime Learning Credit
💰The AOTC offers a larger credit amount and can be claimed for each eligible student
📚The AOTC covers the first four years of post-secondary education, while the Lifetime Learning Credit applies to any kind of education
🎓To claim the AOTC, the student must be pursuing a degree and enrolled at least half-time
💼The AOTC has income limits, and eligibility phase-outs may apply
What is the difference between the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit?
—The AOTC covers the first four years of post-secondary education, offers a larger credit amount, and can be claimed for each eligible student. The Lifetime Learning Credit applies to any kind of education and is not limited to a specific number of years.
Can I claim the AOTC if I am not pursuing a degree?
—No, the AOTC is specifically for students pursuing a degree program. If you are taking individual courses or not committed to a degree, you may be eligible for the Lifetime Learning Credit instead.
Are there income limits for claiming the AOTC?
—Yes, there are income limits for the AOTC. These limits vary depending on your filing status. If your income exceeds the limit, you may not be eligible for the full credit or any credit at all.
Can I claim the AOTC for multiple students in my household?
—Yes, you can claim the AOTC for each eligible student in your household, as long as they meet the requirements. This means you can potentially receive multiple credits if you have more than one student in college.
Can I claim the AOTC if I have already claimed it for four years?
—No, the AOTC is limited to four years per eligible student. Once you have claimed the AOTC for the maximum number of years, you cannot claim it again. However, you may still be eligible for the Lifetime Learning Credit.
00:02This video explains how to claim the education tax credit using IRS Form 8863, specifically the American Opportunity Tax Credit (AOTC).
08:13The AOTC covers the first four years of post-secondary education and provides a larger credit amount compared to the Lifetime Learning Credit. It can be claimed on a per-student basis.
11:59Qualified education expenses are limited to $4,000, with the AOTC calculated based on a percentage of the expenses exceeding $2,000.
13:34The AOTC has income limits and phase-outs based on the taxpayer's filing status. Higher income levels may result in a reduced or no credit.
15:37FAQ: Learn about the differences between the AOTC and the Lifetime Learning Credit, eligibility requirements, income limits, and claiming the credit for multiple students in a household.
