Help With College Costs thru Tax Credits
May 29 2009
Under a new law passed in February, more parents and students now qualify for a tax credit to help pay for college expenses. The credit provided by the American Opportunity Credit will apply to educational expenses in 2009 and 2010.
The new credit modifies the existing Hope Credit making the Hope Credit available to a broader range of taxpayers, including many with higher incomes and those who owe no tax. It also adds required course materials to the list of qualifying expenses and allows the credit to be claimed for four post-secondary education years instead of two. Many of those eligible will qualify for the maximum annual credit of $2,500 per student.
The full credit is available to individuals whose modified adjusted gross income is $80,000 or less, or $160,000 or less for married couples filing a joint return. The credit is phased out for taxpayers with incomes above these levels. These income limits are higher than under the existing Hope and Lifetime Learning Credits.
The American Opportunity Credit is not available on the 2008 returns taxpayers are filing during 2009. For more info check IRS Pub 970.
