American Opportunity Tax Credit

The Obama Administration extended textbook affordability measures. Under the American Recovery and Reinvestment Act (ARRA), textbook and other course material expenses incurred in 2009 through 2012 that are not covered by scholarship or grant aid may be counted towards the tax credit called the American Opportunity Tax Credit on that respective year’s tax return. Students may be reimbursed for up to 100% of the cost of required textbooks and other course materials.

According to the IRS, the new credit temporarily replaces and expands the previous Hope Credit for tax years 2009 through 2012, making the American Opportunity Tax 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
  • Allows the credit to be claimed for the first four post-secondary education years instead of two

Many of those eligible will qualify for the maximum annual credit of $2,500 per student, which is more than $700 higher than the old Hope Credit, and, for the first time, will provide a partial refund of up to $1,000. For more information visit:

Leave a Reply

Your email address will not be published. Required fields are marked *