College Tax Savings: American Opportunity Tax Credit

The American Opportunity Tax Credit helps offset the cost of college by providing a tax credit for qualified education expenses paid for an eligible student during the first four years of higher education.

You can receive a credit of up to $2,500 per eligible student each year. This includes 100% of the first $2,000 spent on qualified education expenses and 25% of the next $2,000.

To qualify for the full credit, your adjusted gross income (AGI) must be $80,000 or less if you file as single, or $160,000 or less if you file jointly.

Qualified expenses include tuition and required fees, as well as books, supplies, and equipment needed for coursework.

Expenses such as room and board, transportation, and medical insurance are not eligible for this credit.