Originally published in AICPA Tax
Insider
The Internal Revenue Code contains a number of deductions and
credits to subsidize the cost of higher education, which are
multiple, overlapping and somewhat conflicting. Some of these are
permanent provisions and some of them are temporary. Besides one,
all of the benefits contain adjusted gross income (AGI) limitations
and phase-outs, which add to the complexity.
American Opportunity Tax Credit (AOTC)
The American Recovery and Investment Act of 2009 modified the
Helping Outstanding Pupils Educationally (HOPE) scholarship credit,
renaming it the American Opportunity Tax Credit for 2009 and 2010.
The Tax Relief, Unemployment Insurance Reauthorization and Job
Creation Act of 2010 (the 2010 Tax Relief Act) extended the AOTC
for 2011 and 2012. The AOTC is a tax credit for some qualified
tuition and related expenses that the taxpayer pays for himself,
his spouse or a dependent. AOTC covers up to 100 percent of a
student's
