<p>IRS says this:
[quote]
The American opportunity tax credit can be claimed for expenses for the first four years of post-secondary education.
[/quote]
So if my son gets his undergrad degree in 3 years can he (or I) claim the AO tax credit for his 1st year of law school? (provided we meet the other requirements for the credit.)</p>
<p>The AO tax credit is only available for the 2009 and 2010 tax years (unless they decide to change that). </p>
<p>Good question though. My instinctive reaction was probably not but it is a little difficult to tell for sure from the tax publication (IRS970). There is a bit where it says the following for the 2009 rules:</p>
<p>
</p>
<p>Which initially made me think the answer to your question was no. But then the exception made me wonder.</p>
<p>So I don’t know for sure. Interested to hear other input though.</p>
<p>Well, this is the government, or to be more specific, the IRS. Nothing is clear. It does seem that whomever wrote the legislation/rules at least considered the possibility that some student would be able to get a degree in less than 3 years. Still I would guess that if you called IRS for clarification 3 times you would get three different answers.</p>
<p>If “proficiency examinations” means credit given for AP scores, then that would apply to my son. He will use AP credits to meet 20% of his graduation requirements. He graduates next spring so if the credits are extended maybe he would qualify.</p>
<p>One reason that makes me think there may be a “gotcha” is that on stuff like FAFSA, as soon as a student graduates he/she becomes independent.</p>
<p>Other opinions?</p>
<p>Per the IRS: Student must be pursuing an undergraduate degree or other recognized education credential. This information can be found here:</p>
<p>[Publication</a> 970 (2009), Tax Benefits for Education](<a href=“Publication 970 (2022), Tax Benefits for Education | Internal Revenue Service”>Publication 970 (2022), Tax Benefits for Education | Internal Revenue Service)</p>
<p>Thanks. What I’m left with is that it’s ambiguous as hell. Typical government. Here are the terms I have found regarding eligibility:</p>
<p>“post-secondary”: that would mean anything after high school
“in a program leading to a degree, certificate, or other recognized educational credential”: a law degree would fit this description.
“undergraduate degree or other recognized education credential”: a law degree is not an undergrad degree, but it is a recognized educational credential, is it not?</p>
<p>I get the sense that the AOTC is intended for undergraduates, but there is considerable room to interpret otherwise. It would be so simple to just say that once a student has obtained an undergraduate degree, he/she is no longer eligible. I guess it never occurred to anyone within the IRS that students are capable of graduating in three years or less.</p>
<p>Oh well, this won’t change any plans. We’ll just have to wait and see.</p>
<p>I know I’ve seen it somewhere that they must be undergrads, but I sure can’t find it. On the other hand, even if a student finishes in three years, it covers four calendar years. Just like the HOPE credit could only be used in the first two years, but covered three calendar years. Their first semester was usually fall. That was year one. Second year was end of freshman year, beginning of sophomore. Third year was end of sophomore, beginning of junior year.</p>
<p>The “gotcha” of them being independent for FAFSA would have nothing to do with it. They can still be dependents on your return assuming they are full time students, and under 24.</p>
<p>OK. I looked up the actual legislation that was passed by congress and signed into law. The AOTC legislation amends the Hope Credit legislation. There are no references in the AOTC legislation to undergraduate education. What it says is. “Credit allowed for first 4 years of post-secondary education” However, this is not really definitive, since language in the Hope Credit legislation may be more specific regarding eligibility.</p>
<p>My guess is that AOTC would be subject to whatever eligibility requirements exist in the Hope Credit legislation. If Hope Credit as/was limited to undergrad education, then AOTC probably is too. Clear as mud, eh?</p>
<p>Edit: I think much of the confusion here comes from the fact that the Hope Credit was for two years. No student was/is likely to complete and undergrad degree in less than two years. Four years is a different story. My son has a HS classmate that got his degree at a 4-yr college in only 2 years. After looking at the Hope Credit legislation I don’t see anything dictates undergraduate only or any limitation on eligibility after an undergraduate degree is obtained. Maybe there’s “hope” after all.</p>
<p>[Internal</a> Revenue Code Section 25A. Hope and Lifetime Learning Credit](<a href=“http://www.tcrs.com/policywatch/policydocs/25a.htm]Internal”>http://www.tcrs.com/policywatch/policydocs/25a.htm)</p>