Why am I eligible for the American Opportunity Credit when I list myself as a half-time student, not a full-time student?

Forum|Forum|3 years ago
April 7, 2023
1 reply
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In both cases, I am in my 2nd year of college and will not be claimed as a dependent by another person.

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AmyC

Employee

The credit requires you be at least half-time and not claimed by someone else. However, you can only claim the AOTC 4 times in your life. You really want to claim it 4 times when it can benefit you. If you don't have a tax liability, you may want to wait.

If you have a small liability, you may want to claim the Lifetime Learning Credit.

For more on education credits, see here

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tamarinuAuthor

Thanks for the response,

I understand the requirements for the credit. So, my question is, why does the credit not apply when I list myself as a full-time student? Full-time is at least half-time, so the credit should apply. It only applies when I list myself as a half-time student.

Hal_Al

Employee

Q. Why does the credit not apply when I list myself as a full-time student?

A. Congress did not want the children of rich parents to claim the credit, when their parents were not eligible. So, there is a special rule for FULL TIME students under age 24.

A full time, unmarried student, under age 24, even if you don't qualify as a dependent, is only eligible for the refundable portion of the American Opportunity Credit if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans or student loans & grants.

Reference: Line 7 instructions for form 8863. https://www.irs.gov/instructions/i8863