The American Opportunity Credit

If you, your spouse, or a dependent for whom you claim an exemption was enrolled at least half-time in the first four years of college in 2014, you may benefit from the American Opportunity credit.

The maximum credit is $2,500. However, the credit applies 100 percent to the first $2,000 of qualified expenses incurred by the student, and 25 percent of the next $2,000, up to the full credit of $2,500. Thus, a student that has at least $4,000 in expenses will receive the full credit.

The American Opportunity credit is available for each student in your family who meets the qualifications:

• he or she has not completed the first four years of post-secondary education before 2014
• is enrolled in a program that leads to a degree, certificate, or other recognized academic credential
• he or she has not already claimed either the Hope or American Opportunity Credit for four years
• is taking at least one-half of the normal full-time load of classes, for at least one academic period beginning during the calendar year
• has not been convicted of a drug-related felony

In 2014, the expenses that count toward the credit are tuition and fees required for attendance and course-related books and materials. Generally, the expenses can be deducted in the year the class begins, if the expenses were paid during that year. However, if you prepay expenses during one year, for a course that begins in the first three months of the following year, you can count those expenses toward the credit in the year they were paid.

Eligible institutions are any accredited public, nonprofit, or for-profit post-secondary institution eligible to participate in federal student aid programs.

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