when the hope credit was expanded and renamed the american opportunity tax credit a portion of the tax credit also became refundable this means if the credit brings the amount of tax the taxpayer owes to zero they can have 40 of the remaining amount of the credit up to 1 000 refunded to them 6
special considerations education tax creditsthe american recovery and reinvestment act arra expanded the hope credit in 2009 this made the credit more accessible to parents and students 7 now more people qualify for the hope credit under the auspices of the american opportunity tax credit the aotc made the hope credit available to a broader range of taxpayers expanding eligibility to those with higher incomes and those who owe no tax the tax is available to individuals with a modified adjusted gross income magi of 80 000 or less 160 000 or less for joint filers 6the irs considers a student qualified if they are enrolled at an accredited postsecondary institution at least part time in one academic year that student must still be enrolled at the institution at the beginning of the tax year taking courses toward a degree or another recognized educational qualification and must not have been convicted of any felony drug offense by the end of the tax year 6taxpayers can claim the credit for up to four years of postsecondary education to reduce the costs of tuition and other eligible expenses according to the irs a qualified educational expense includes tuition paid to the school and expenses for books supplies and equipment that may have been bought from external sources these expenses qualify if taxpayers use student loans to pay for them but not if they use scholarships grants or funds from a 529 savings plan 8