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I took a fifth year of college before finishing my bachelor's degree in May of 2022. Am I still eligible for the American Opportunity Credit?

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April 17, 2023
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TurboTax Deluxe Online

Best answer by Hal_Al

As part of the interview, TurboTax (TT) asks you how many times, in the past, you have claimed the American Opportunity Credit (AOC). The short coming, in TT, is that it will allow you to continue if you don't answer that question.

You may be able to claim the smaller Lifetime Learning Credit (LLC) for 2022 and not have to pay back the full $2500. The LLC is 20% of qualified expenses (tuition and fees only, no books or computers). Unlike the AOC, no part of the LLC is refundable (it can only reduce your tax liability).

You say "it only allows the credit to be filed 4 times for a given student, no matter how small the credit in each year". If your credit was less than $2500 in either 2020 or 2021, consider filing an amended return for that year, so that you can get the full AOC for 2022.

Hal_Al

Employee

Yes. If you had not completed the requirements for a bachelor's degree, you had also not completed 4 years of post secondary education for purposes of the AOTC.

The is also a limit of claiming the AOTC 4 times. Since 5 years of college typically takes place over 6 calendar/tax years, there's a possibility that you and/or your parents have already claimed the AOTC, on your education, the maximum 4 times.

K

ktcref

I used TurboTax to file my 2022 tax return, and it allowed me to file for a fifth time for the same student. (My daughter was taking 5 years to complete her 4-year degree.) The IRS flagged it for review because this is an error; it only allows the credit to be filed 4 times for a given student, no matter how small the credit in each year. I'll have to pay back the $2,500 credit with interest. TurboTax should have caught this error. I've been using TurboTax continuously for more than 20 years.

Hal_AlAnswer

Employee

As part of the interview, TurboTax (TT) asks you how many times, in the past, you have claimed the American Opportunity Credit (AOC). The short coming, in TT, is that it will allow you to continue if you don't answer that question.

You may be able to claim the smaller Lifetime Learning Credit (LLC) for 2022 and not have to pay back the full $2500. The LLC is 20% of qualified expenses (tuition and fees only, no books or computers). Unlike the AOC, no part of the LLC is refundable (it can only reduce your tax liability).

You say "it only allows the credit to be filed 4 times for a given student, no matter how small the credit in each year". If your credit was less than $2500 in either 2020 or 2021, consider filing an amended return for that year, so that you can get the full AOC for 2022.