Page 1:
Are you or someone in your family going to college? If so, you might be able to get money back when you file your taxes. One way to do that is by using the American Opportunity Tax Credit, also called the AOTC. This credit can help cover the cost of higher education.
The American Opportunity Tax Credit (AOTC) is a special tax credit for people who pay for college. It can give you back up to $2,500 each year for each student. This money can go toward tuition, books, and school supplies.
To claim the American Opportunity Tax Credit (AOTC), the student must be in their first four years of college. That means if they are in year five or beyond, they can’t get the credit. Also, they must be taking classes at least half-time and be working toward a degree or certificate.
Before you claim the American Opportunity Tax Credit (AOTC), you must check a few things:
- The student has a Social Security number.
- They haven’t already claimed the AOTC four times.
- They are not listed as a dependent on someone else’s tax return (unless you’re the one claiming them).
Page 2:
To claim the American Opportunity Tax Credit (AOTC) in 2025, you’ll need a tax form called the 1098-T. This form comes from the school the student goes to. It shows how much you paid for tuition and school fees. You should get it in the mail or online in January.
After you get the 1098-T form, you fill out IRS Form 8863 when you do your taxes. This form helps you figure out how much credit you can get. You will enter the information about tuition, books, and other qualified expenses. Only certain costs count, like books you need for class or course supplies. Room and board do not count.
Keep all your receipts! If the IRS wants to double-check your taxes, you need to show proof of what you paid. If you paid with a credit card or check, keep that statement too.
Your income matters when claiming the American Opportunity Tax Credit (AOTC). If your income is too high, you may not get the full amount. For 2025, if you make more than $90,000 as a single person or $180,000 as a married couple filing jointly, you can’t claim the full credit. If your income is close to these numbers, your credit will be smaller.
Page 3:
Here’s a step-by-step guide to claim the American Opportunity Tax Credit (AOTC) in 2025:
- Make sure the student is eligible.
- Gather receipts for tuition, books, and supplies.
- Get your 1098-T form from the school.
- Fill out IRS Form 8863.
- Include the form with your tax return.
If you use tax software, it will walk you through these steps. You can also ask a tax professional for help.
Remember, the American Opportunity Tax Credit (AOTC) is a great way to save money on college costs. But you must follow the rules carefully. The IRS checks these credits, and if you make a mistake, it could delay your refund.
In 2025, make sure to plan ahead. Track your education expenses during the year. Keep your forms and receipts in a safe place. That way, when tax time comes, you’ll be ready to claim the American Opportunity Tax Credit (AOTC) with confidence.
College is expensive, but the AOTC can help ease the cost. Don’t miss out on this important tax credit that can give your family a big boost!
