American Opportunity Tax Credit

The American Opportunity Tax Credit (AOTC) is a tax benefit that helps families reduce the cost of higher education. It offers a maximum credit of up to $2,500 per eligible student for the first four years of college. The credit covers tuition, fees, and course materials. If the credit exceeds your taxes owed, up to 40% ($1,000) may be refundable. Eligibility depends on income, student enrollment status, and other factors. The AOTC is designed to encourage college attendance by making education more affordable through tax savings.