Why is my American Opportunity Credit $1,226?

Forum|Forum|1 year ago
February 17, 2025
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Hi all. This is my first year filing taxes and I'm trying to work out why TurboTax is only able to claim $1,226 from the American Opportunity Credit. My expenses are easily high enough (over $10,000) for the maximum amount of $2,500. Now, I understand that a maximum of $1,000 is refundable. However, I'm not at this limit; my federal refund is only $399, so I should be able to get an additional $601. Is there some obvious bit of math I'm missing? Thanks!

TurboTax PLUS Online

Hal_Al

Employee

Q. Is there some obvious bit of math I'm missing?

A. Yes*. You should not be getting an additional $601.

If your AOTC is only $1226 and you have enough expenses for the full $2500, the usual explanation would be the $1000 (refundable) is on line 29 of form 1040 and the $226 is included on line 20 because that's all it takes to get your tax to 0. If line 20 is something other than $226, you have other credits from Schedule 3. The non refundable AOTC amount is on line 3 of Schedule 3.

*For details, you may have to see the Credit Limit Worksheet for line 19 of form 8863 for the calculation of the non refundable part (and that's a complicated bit of math).