American Opportunity Credit along with State tax credit.

Forum|Forum|4 years ago
March 31, 2022
2 replies
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Hello,

This year my child had a small amount of money paid for college tuition that was not covered by scholarship. We talk about roughly $300. TurboTax claimed the American Opportunity tax credit for this amount showing eligibility for full $300 credit. That's great. Now when I do my NY state taxes it also has a tax credit for tuition. The eligibility criteria says it's the money paid towards tuition that was not covered by scholarships.

For the purpose of NY state does American Opportunity credit count as a scholarship or otherwise makes the money ineligible? It seems that if I enter $300 as eligible tuition expense - I get $200 NY state credit in addition to $300 AOTC, hence receiving back more money than I paid for the tuition that year. Seems inappropriate, but does anyone know for sure whether it is claimable against the state or not?

Please only answer if you know for a fact.

Thank you.

MinhT1

New York has a college tuition tax credit.

If your total qualified college tuition expenses total less than $5,000, the credit is equal to your qualified college tuition expenses or $200, whichever is less.

You had $300 in qualified college tuition expenses, so your NY credit is $200.

Please read this document from the New York State Department of Taxation and Finance for more information.

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Hal_Al

Employee

Q. For the purpose of NY state does American Opportunity credit count as a scholarship or otherwise makes the money ineligible?

A. No.

There's no "double dipping" involved. You are using the same $300 to claim a credit on both federal and state tax. It's only the reverse of the state and feds both taxing your one income.