The American Opportunity Tax Credit is set to expire after December 31, 2012 unless it is extended by Congress. The American Opportunity Tax Credit is a refundable tax credit for undergraduate college expenses. The credit provides up to $2,500 in tax credits on the first $4,000 of qualifying education expenses. Up to 40% of the credit is refundable, meaning that it can generate a larger refund. If you qualify, the American Opportunity Tax Credit can be used to offset higher education expenses paid in 2012.
The American Opportunity Tax Credit provides qualified students or eligible parents with a great tax deduction. During this summer break, eligible tax payers need to ensure they are set to receive the full benefit of the tax credit. Eligible tax payers should consider paying their 2013 tuition expenses in 2012 in order to receive the full entitlement of the American Opportunity Tax Credit before it expires.
For more information on this tax credit, visit our Knowledgebase here.