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American Opportunity Tax Credit Background

College students and their parents may qualify for the American Opportunity Tax Credit when filing their taxes.

The American Recovery and Reinvestment Act  (ARRA) authorized the AOTC to modify the Hope Credit for tax years 2009 and 2010.  

Under ARRA, the AOTC 

  • Can now be claimed by eligible taxpayers for four college years instead of two
  • Was made available to more taxpayers including many with higher incomes and those that owe no taxes
  • Can now be claimed for required course materials and other listed qualifying education expenses

 

The Tax Relief and Job Creation Act of 2010 extended the AOTC to tax years 2011 and 2012.

 

The American Taxpayer Relief Act of 2012 extended AOTC through tax year 2017.

The Protecting Americans from Tax Hikes Act of 2015 (PATH)

  • Made the American Opportunity Tax Credit permanent, replacing the Hope Credit. 
  • Prohibited individuals from retroactively claiming the AOTC if they didn't have an SSN (or ITIN) by the due date of the return (including extensions). They can't claim the American opportunity credit on either the original or an amended return, even if they later get an SSN (or ITIN). Also, they can't claim this credit on their original or an amended return for a student who didn't have an SSN, ATIN, or ITIN by the due date of the return (including extensions), even if the student later gets one of those numbers.
  • Extended paid preparer due diligence requirements and the associated penalty for failure to comply to include all AOTC claims.
  • Expanded recertification requirements for individuals improperly claiming a credit to include all AOTC claims

 

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Page Last Reviewed or Updated: 28-Jan-2017