T.he American Opportunity Tax Credit (AOTC) is a credit awarded for eligible educational expenses paid to eligible students throughout the first four years of higher education. united states of america.
Each eligible student is eligible for up to $2,500 in credit per year.
If the credit reduces the outstanding tax amount to zero, you are entitled to a refund of 40% of the remaining credit funds (up to $1,000).
Each eligible student will receive a credit equal to 100% of the first $2,000 of eligible educational expenses paid on their behalf, and an additional 25% of each subsequent $2,000 of such expenses.
Can students under the age of 24 apply for the AOTC?
If you are under 24 years of age at the end of 2020 and meet any of the criteria below, you may not claim a portion of your American Opportunity Credit as a refundable tax return credit. Alternatively, you can use only the non-refundable portion of your allowable credit to reduce your taxes.
a) was under 18 years of age at the end of 2020, or b) was 18 years of age at the end of 2020 and earnings only covered approximately half of the support, or c) was between the ages of 18 and 24 If you are a full-time student at the end of 2020 and your income covers less than half of your support, you are not eligible for a refundable American Opportunity Credit.
Additionally, if you did not file a combined return for 2020 and at least one of your parents was still alive at the end of the year, you are not eligible.
If you do not meet these requirements, you may still be eligible to claim a portion of your acceptable American Opportunity Credit as a refundable credit.
However, if all of the following conditions are met, you will not be eligible to receive any portion of the acceptable American Opportunity Credits as refundable credits:
- Was under the age of 24 at the end of 2020
- Be at least 18 years old at the end of 2020
- You were a full-time student in 2020
- Your earnings were less than half of your support
- One of the parents was alive at the end of 2020
- Did not file a joint return for 2020
