7. Credit helps with college expenses
The American Opportunity Credit replaces the Hope Scholarship Credit, and is available for the first four years of college, and some post-secondary education. It does not apply to graduate-level courses.
The maximum credit is $2,500 per student for each year, and 40 percent of the credit is refundable, which means you can receive up to $1,000 even if you owe no taxes.
Also, the credit has been expanded to include books, supplies, and equipment needed for a course of study even if the materials are not purchased from the educational institution as a condition of enrollment or attendance.
The credit phases out if your modified adjusted gross income is between $160,000 and $180,000 (married filing jointly) and $80,000 and $90,000 (other filers).
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