American Opportunity Tax Credit
The American Opportunity Tax Credit, offsets the cost of tuition, fees, course-related books, supplies, and equipment for higher education by reducing the amount of income tax you are liable for. In addition, the credit is partially refundable—meaning that you may be able to claim the tax credit and receive a check from the IRS even if you pay no income tax. The amount of the credit can be up to $2,500 per student. Up to $1,000 of the credit can be refunded to you if your credit is more than the amount of tax you owe. You are eligible for the credit if your modified adjusted gross income is $90,000 or less (for married couples filing a joint return, $180,000 or less). The amount of the credit varies depending on income and how much you spent on higher education expenses, and how many eligible students are in your family.
American Recovery and Reinvestment Act of 2009
The credit is available for all four years of undergraduate study.
The amount of the credit is 100% of the first $2,000 in qualified expenses and 25% of the second $2,000. It is available to families with a joint income less than $180,000 or single parent households with an income less than $90,000 (credit begins to be phased out for joint incomes ranging from $160,000-$180,000 and single incomes between $80,000-$90,000). In addition, the credit is only available to permanent residents or U.S. citizens and, if tax-filers are married, to those that file a joint tax return.
Lifetime Learning Tax Credit
The Lifetime Learning Tax Credit is also available for qualified tuition and related expenses for students enrolled in eligible educational institutions. The actual amount of the credit depends on a family’s income, the amount of qualified tuition and fees paid, and the amount of certain scholarships and allowances subtracted from tuition. This credit is family-based (up to $2,000 per tax return) rather than based on the number of dependents in a family as with the Hope Tax Credit (some income cut-offs do apply).
The form to claim the American Opportunity Tax Credit or Lifetime Learning Credit (1098T) is now available online at the Maximus Federal Services, Inc. Web site. Maximus provides tax credit reporting services for Arcadia University students.
To retrieve your 1098-T electronically:
- Launch a web browser and go to http://tra.maximus.com
- Click the “First Time Students” Button.
- Enter your full First and Last names and the last 5 digits of your Social Security Number.
- Click Submit.
- If records are present for you, you will be instructed to create an account. Follow the instructions on the website to create a free account and retrieve your 1098-T. If records are not found for you or you have difficulty creating account, use the “Help” link in the left menu.
If you do not retrieve your 1098-T electronically, one will be mailed to you. Paper 1098-Ts will not be mailed until near January 31st and may reach you sometime after that date. Be aware that you can get additional copies online in the future as well.
Please contact the Maximus Call Center at 800-223-0043 or the Arcadia Business Office, at 267-620-4792 or by e-mail at firstname.lastname@example.org, with any questions. Maximus also provides useful information on education tax credits for eligible tax payers.
Tuition and Fees Tax Deduction
The Tuition and Fees Tax Deduction can reduce taxable income by as much as $4,000. This deduction is taken as an adjustment to income and may benefit taxpayers who do not qualify for either the Hope or Lifetime Learning Education Tax Credits. Up to $4,000 may be deducted from tuition and fees required for enrollment or attendance at an eligible postsecondary institution.
Families who think they may qualify should contact their tax accountant.