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American Opportunity Tax Credit

The eligibility requirements for the American Opportunity Tax Credit are as follows:

  • The student must have a high school diploma or its equivalent.
  • The student must be enrolled at least halftime in a program leading to a degree or certificate during at least one semester during the tax year.
  • The student has not completed the first four years of post-secondary education as of the beginning of the taxable year
  • The student must be free of any conviction for a Federal or State felony offense due to the possession or distribution of a controlled substance.

Additional American Opportunity Tax Credit information:

  • The American opportunity tax credit covers qualified costs, which includes tuition, university fee and capital projects, but specifically excludes books, room and board, nonacademic fees (i.e. student activity fee, MASSPIRG, Health Insurance) and expenses involving sports, games or hobbies unless they are part of the student's degree program.
  • Generally, a taxpayer whose modified adjusted gross income is $80,000 or less ($160,000 or less for joint filers) can claim the credit for the qualified expenses of an eligible student. The credit is reduced if a taxpayer’s modified adjusted gross income exceeds those amounts. A taxpayer whose modified adjusted gross income is greater than $90,000 ($180,000 for joint filers) cannot claim the credit.
  • Scholarships and grant aid do not count as qualified tuition and related expenses paid by the taxpayer. Generally only out-of-pocket expenses count, however, this includes gifts, bequests, and inheritances as qualified tuition and expenses paid by the taxpayer.
  •  American opportunity tax credit, which expanded and renamed the already-existing Hope scholarship credit, can be claimed for expenses paid for tuition, certain fees and course materials for higher education.

What Fitchburg State expenses qualify?

  • "Qualified Expenses" are costs for instruction required for a degree. These include tuition, university fee and capital projects. Room Charges, Meal Plans, and Student Activity Fee are NOT eligible.

The above information is for informational purposes only and subject to change.

For more information on the American Opportunity Tax Credit visit the IRS website.