Education Tax Credits

If you have a son or daughter who is or will be pursuing a college degree, you may wish to keep in mind the possibility of taking advantage of two income tax credits that may be available in connection with "qualified tuition and related expenses" incurred by your child while attending college. A brief summary of each such credit now follows:

1. American Opportunity Tax Credit. This credit is available for each of the first four years of your child's post-secondary education. The measure of the credit is 100% of the first $2,000 of "qualified tuition and related expenses" that your child incurs plus 25% of the next $2,000 of such expenses that he or she incurs each year — with the proviso that if your modified adjusted gross income for the tax year in question is between $80,000 and $90,000 (for a single filer) or between $160,000 and $180,000 (for joint filers), the credit phases out. To the extent not used, 40% of the American Opportunity Tax Credit may