HueyLD wrote:AAA wrote:One of our children is in the last year of a five-year program (due to co-ops in earlier years) and is considered by the school to be a senior. The AO credit was only used three times previously for this child.
In Pub 970 (Tax Benefits for Education) the IRS says in one place says "Available ONLY for the first 4 years of postsecondary education." That would seem to make it unavailable to us at this time. But elsewhere in Pub 970, under Who is an Eligible Student, it says, among other things: "The student had not completed the first 4 years of postsecondary education (generally, the freshman, sophomore, junior, and senior years of college)."
So do you think there's room here to interpret what is meant by "4 years of postsecondary education" as long as the student is legitimately considered a senior?
On page G-3 of the IRS Pub 4012, it says:
"Even if the student's post-secondary education extends beyond four tax years, the American Opportunity credit is available for only four years."
jared wrote:The determining factor for the "first 4 years of college" rule is whether or not the institution awards the student with 4 years of academic credit (excluding credit based on proficiency exams) at that institution prior to the beginning of that tax year.
Yes, the credit can be claimed for only 4 taxable years. However, the student may actually be in school for a period that lasts longer than 4 years and still be eligible for the credit.
HueyLD wrote:Here is more IRS' guidelines:Q12. Who is an eligible student for the American opportunity tax credit?
A. For the American opportunity tax credit, an eligible student is a student who: (1) is enrolled in a program leading toward a degree, certificate or other recognized post-secondary educational credential; (2) has not completed the first four years of post-secondary education as of the beginning of the taxable year; (3) for at least one academic period is carrying at least ½ of the normal full-time work load for the course of study the student is pursuing; and (4) has not been convicted of a felony drug offense.
Q13. If a student was an undergraduate during the first part of the taxable year and became a graduate student that same year, will the student qualify for the American opportunity tax credit?
A. If a student has not completed the first four years of post-secondary education as of the beginning of the taxable year, and has not claimed the Hope scholarship credit and/or the American opportunity tax credit for more than four taxable years, the student can claim the American opportunity tax credit for qualified expenses paid during the entire taxable year.
http://www.irs.gov/uac/American-Opportu ... nd-Answers
(iii)Year of study requirement.—As of the beginning of the taxable year, the student has not completed the first two years of postsecondary education at an eligible educational institution. Whether a student has completed the first two years of postsecondary education at an eligible educational institution as of the beginning of a taxable year is determined based on whether the institution in which the student is enrolled in a degree program (as described in paragraph (d)(1)(i) of this section) awards the student two years of academic credit at that institution for postsecondary course work completed by the student prior to the beginning of the taxable year. Any academic credit awarded by the eligible educational institution solely on the basis of the student's performance on proficiency examinations is disregarded in determining whether the student has completed two years of postsecondary education; and