Education Credits 2011
Did you take your education credits on your 2011 taxes? Did you know it is limited? The American Opportunity Tax Credit is available to eligible taxpayers on a per-student basis if you have qualified expenses paid in the current tax year as a student enrolled at or attending an eligible educational institution. You cannot claim credits if your filing status is married and filing separately or you are claimed as a dependent on another person’s tax return (such as your parents’ return). The full amount of the American Opportunity Tax Credit is available to married taxpayers filing jointly with an adjusted gross income (AGI) of $180,000 or less and to single taxpayers with an AGI of $90,000 or less. Married taxpayers with a combined AGI of $180,000 or greater (and single taxpayers with an AGI of $90,000 or greater) are ineligible for this credit.
The amount that may be claimed as a credit is generally equal to:(1) 100 percent of the first $2,000 of the taxpayer’s out-of-pocket expenses for each student’s qualified tuition and related expenses; plus (2) 25 percent of the next $2,000 of the taxpayer’s out-of-pocket expenses for each student’s qualified tuition and related expenses. Thus, the maximum credit a taxpayer may claim for a taxable year is $2,500 multiplied by the number of students in the family who meet the eligibility requirements described above. Qualified tuition and related expenses has been expanded to now include course materials (books, supplies, equipment) whether or not they are purchased from an eligible institution as a condition of enrollment. Also, new for 2009, up to 40% of the American Opportunity Tax Credit) is now refundable. This means that even if you owe no taxes, you may still qualify to have a portion of the American Opportunity Tax Credit refunded.
It is worth the credit, but not nearly enough to cover or help you with education expenses.
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