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19 November, 11:12

Steve goes to Tri-State University and pays $40,000 in tuition. Steve works to pay for his schooling and has an AGI of $37,000.

How much is his American Opportunity tax credit?

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  1. 19 November, 14:00
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    His American Opportunity tax credit is $2,500.

    Explanation:

    A taxpayer who has a modified adjusted gross income of $80,000 or less can claim the credit for the qualified expenses of an eligible student.

    Taxpayers will receive a tax credit based on 100% of the first $2,000, plus 25% of the next $2,000 that is paid during the taxable year for tuition, fees and course materials and also, 40% of the credit (up to $1,000) is refundable.

    Therefore, His American Opportunity tax credit is $2,500.
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Home » Business » Steve goes to Tri-State University and pays $40,000 in tuition. Steve works to pay for his schooling and has an AGI of $37,000. How much is his American Opportunity tax credit?
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