It’s called the American Opportunity Tax Credit (AOTC)- basically, you get back the first $2,000 in full, and 25% of the next $2,000. So if you spend $4,000 or more, you get back $2,500.
That $4,000 can be tuition, books, supplies, etc.
The AOTC credit can be claimed for up to 4 years (amend your taxes for any recent years you qualified and didn’t claim it). After 4 years, the Lifetime Learning Credit (LLC) can be claimed for as many more years as you attend school.
They both are worth the same, but the difference is the AOTC is refundable and the LLC is not. That means with the AOTC if you would have gotten $100 back in taxes, you would get $2,600 back instead. If you would have owed $100, you’d get $2,400 back instead. The LLC is not refundable, but it reduces any tax you owe. So if you would have owed $2,000 then you would owe $0 but still get nothing back. If you would have gotten $200 back, you still just get $200.
Here is a link to the IRS website about the AOTC: https://www.irs.gov/credits-deductions/individuals/aotc
There is a link at the bottom that explains the Lifetime Learning Credit.
Submitted June 08, 2023 at 11:37PM by ComplexIndividual866 https://ift.tt/ZB1XWEp
