College Tax Credit for 2009, 2010
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For 2009-2010 only, Congress enacted a new college tuition tax credit:
The American Opportunity Tax Credit
- worth up to $2,500
- for single filers with income below $80,000 (partial credit for those between $80,000 and $90,000) and joint filers with incomes below $160,000 (partial credit for those between $160,000 and $180,000)
- 100% of the first $2,000 in qualified tuition and related expenses; and
- 25% of the next $2,000 in qualified tuition and related expenses
- for the parents of a dependent student or for the student if not claimed as a dependent
- 40% of the credit ($1,000) is refundable
After 2010, the college tax credit scene reverts to the old ones:
There's the Hope Tax Credit or there is
The Lifetime Learning Credit
- worth up to $2,000
- for single filers with income below $48,000 (partial credit for those between $48,000 and $58,000) and joint filers with incomes below $96,000 (partial credit for those between $96,000 and $116,000)
- 20% of the first $10,000 in qualified tuition and related expenses
- for the parents of a dependent student or for the student if not claimed as a dependent
- may be used for college tuition at any level (part-time, also)
Education tax credits will also be subtracted from your income (taxed and untaxed) on your FAFSA next year.
Federal College Tax Credits FAQs
Which college expenses can be used to claim the credit?Expenses that are required for enrollment or attendance at an eligible school, such as:
- tuition
- fees (only if mandatory)
- books (whether bought at the school store or not)
- supplies that are necessary for a course of study
- equipment that is necessary for a course of study
- any expense that the school mandates as a condition for attendance
What if expenses were paid with college loans?
You can take the credit- even if the loan is deferred until after graduation.
What about college grants and scholarships, such as a Pell grant?
If the grant or scholarship is tax-free (as a Pell grant is) you cannot use the portion of expenses paid by that award to figure the credit. If you had expenses beyond the award amount, use that portion for the credit.
What is the time frame allowed to claim a college tax credit for 2009?
You may claim the credit for expenses paid in 2009 for college classes that began in 2009 or the first three months of 2010. So if you paid in December for the spring semester of 2010- that counts.
The Tuition and Fees Deduction
If you choose, you can claim an education tax deduction instead of a college tuition tax credit.- worth up to $4,000 off your income
- for single filers with income below $80,000 and joint filers with incomes below $160,000
- for the parents of a dependent student or for the student if not claimed as a dependent
- may not be used for any expenses other than tuition and fees (like room and board)
Usually a college tax deduction is used when your income is too high for a higher education tax credit. A school tax credit reduces the amount of taxes you pay and an education tax deduction reduces your income. (thereby lowering the amount of taxes you pay, but not as much)
Want the American Opportunity Tax Credit Extended?
Tell why you think this credit should be extended past 2010. How will this help you?
I'll send a link to these comments to the U.S. Congress Joint Committee on Taxation.
Let your voice be heard!
Other Voices
Click below to see contributions from other visitors to this page...
Extension of the American Opportunity Tax Credit beyond 2010
College tuition costs are increasing at a pace well beyond the cost of living and well beyond our ability to absorb these increases. The economy is such ...
Extend the Tax Credit
As the economy is still in recession I believe this tax credit should continue on till 2010. An education is important to many of us but the expenses of ...
"Knowledge Is The Key To The Treasure"
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I would like to see the American Tax Credit extended through 2010 and throughout our existence as a country. Hope is that the high (King worthy as they ...
I want the American Opportunity Tax Credit Extended.
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I will be starting school the summer of 2010. This tax credit, if extended, will help me continue school and be able to finally finish my associate degree....
College students Need More Help
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This will be extremely helpful for me this year. It will enable me to pay off a portion of my debt and attend summer courses ( which have been too expensive ...
Why is AOTC Going to End?
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Why would this credit end? If it's actually used a lot, what would make Congress think it should end? There are many, many other programs that should be ...
Please Extend the Tuition and Fees Tax Credit
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We are the parents of a child who will be entering college in the Fall of '10. The unplanned birth of our child occurred when we were both very young (18)...
EXTEND THE AMERICAN TAX OPPORTUNITY TAX CREDIT.
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I HAVE AT LEAST 2+ MORE YEARS OF COLLEGE. I WENT BACK TO COLLEGE BECAUSE OF THE PRESIDENTS PROMISE TO HELP US WITH TAX DEDUCTIONS. I HAVE NOT GOT THE ...
Extend the American Opportunity Tax Credit
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The American Opportunity Tax Credit will help us greatly financially, as our desire is to educate our children so they will be able to contribute back ...
High College Tuition Costs
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January 29, 2010
Attn: U.S. Congress Joint Committee on Taxation
Dear Committee;
The tax credit will help me pay for my next term.
As I'm sure ...
College credit or Deductions for more americans
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The income requirements should be higher to receive a tax deduction or credit. The cost of college has increased faster than incomes. Working parents with ...
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I am going back to school because of this tax credit I've heard about; I need three or less years to finish my BS and one year of tax credits just isn'...
Keep the College Tax Credit
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The college tax credit should be extended, because not only is the cost of a higher education increasing so are the people who want to attend college but ...
Tax credit needed
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It is very difficult to send a child to college even with in-state tuition. Too many students are dropping out of college due to the economy. College ...
The American Opportunity Tax Credit should be extended
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This tax credit should be extended because the economy is so bad, that people have been forced to go back to school. The price of everything is going ...
A College Tax Credit for the Life of Your College Loans
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Since my student loans are going to total a lot more than $1,000 per year, I think this tax credit should last for as long as I'm paying.
That's ...
Extend the College Tax Credit
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As a student, I feel strongly that the current college tax credit structure should be extended.
Tuition costs are on a seemingly endless spiral into ...
The new college tax credit should be included in your budgeting calculations for the 2010 and 2011 school years. This is money that you can put towards your tuition and reduce your future college loan debt.And to get the most financial aid you can qualify for, learn about this year's FAFSA, before you fill it out.
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