If you’re thinking about heading to school or if you’re
sending a child off to college, you need to know about the American opportunity
tax credit. This credit is good for students who pay taxes and can help them to
supplement the high cost of a college education. The credit reduces the taxes
owed based on the amount of money spent So, the more one spends on college, the
higher the credit.
Eligibility Requirements
As with most credits, there are strict eligibility
requirements that must be met in order to receive this credit. They include:
l The
student must not have completed four years of schooling.
l The
student must be enrolled in college for at least one semester during the tax
year.
l The
student must meet the college’s eligibility requirements for part-time
enrollment.
l The
program in which the student is enrolled must end in a degree or certificate.
l The
student must not have ever been convicted of a drug related crime.
l The
person applying for the credit must be paying some or all of the educational
tuition and fees.
l The
student must be enrolled in a qualifying college or post-secondary school.
The American Opportunity Credit and Financial Aid
Most students will receive some type of financial aid to
help fund their education. This may include loans, scholarships, grants, and
aid offered by the institution itself. The good news is that any borrowed funds
can be counted toward the credit since they will eventually have to be repaid.
However, aid that does not have to be repaid does not count toward the credit.
Dependents
Each eligible student is entitled to receive one tax credit
and no more. For parents who are claiming the credit on behalf of dependent’s
expenses, the same credit must be used for both dependents.
No comments:
Post a Comment
I welcome your comments here :)