College students strapped for cash are in for a treat this tax season. Under a change in the tax code, the cost of textbooks and course materials are eligible for a tax credit for the first time for students and their families.
The American Opportunity Tax Credit makes textbooks and other course material expenses—including tuition and fees incurred in 2009-2010 not covered by scholarships or grants—eligible to be claimed as a tax credit of up to $2,500 on that year’s tax return.
The new credit is a modification of the existing Hope Credit for tax years 2009 and 2010. The IRS says it makes the Hope Credit available to a broader range of taxpayers, including many who have higher incomes, or who owe no tax.
A major addition to the list of qualifying expenses is required course materials (including textbooks) which allows credit to be claimed for four post-secondary education years instead of two. The maximum annual credit is $2,500 per student.
The full credit is available to people with a modified adjusted gross income of $80,000 or less. For married couples filing a joint return the amount is $160,000 or less.
According to the IRS, under the American Recovery and Reinvestment Act (ARRA), more parents and students will qualify over the next two years for the credit. The purpose of the American Opportunity Credit is to pay for college expenses.
To help students understand the tax credit, the National Association of College Stores (NACS) has launched a Web site developed in cooperation with the Internal Revenue Service, (www.textbookaid.org).
For more detailed information about the American Opportunity Tax Credit visit www.irs.gov/recovery.
The American Opportunity Tax Credit makes textbooks and other course material expenses—including tuition and fees incurred in 2009-2010 not covered by scholarships or grants—eligible to be claimed as a tax credit of up to $2,500 on that year’s tax return.
The new credit is a modification of the existing Hope Credit for tax years 2009 and 2010. The IRS says it makes the Hope Credit available to a broader range of taxpayers, including many who have higher incomes, or who owe no tax.
A major addition to the list of qualifying expenses is required course materials (including textbooks) which allows credit to be claimed for four post-secondary education years instead of two. The maximum annual credit is $2,500 per student.
The full credit is available to people with a modified adjusted gross income of $80,000 or less. For married couples filing a joint return the amount is $160,000 or less.
According to the IRS, under the American Recovery and Reinvestment Act (ARRA), more parents and students will qualify over the next two years for the credit. The purpose of the American Opportunity Credit is to pay for college expenses.
To help students understand the tax credit, the National Association of College Stores (NACS) has launched a Web site developed in cooperation with the Internal Revenue Service, (www.textbookaid.org).
For more detailed information about the American Opportunity Tax Credit visit www.irs.gov/recovery.
