<p>I meant "American Opportunity Credit" in the thread title - sorry.., so - </p>
<p>We had the $4000+ of qualified expenses for the American Opportunity Credit, but when we received our taxes back from the preparer today, he split the $2500 credit between Taxes and Credits/Line 49 ($1500.) on the 1040 return and Payments/Line 66 on the 1040 ($1000). </p>
<p>Do I report the total $2500 on FAFSA/CSS (my tax guy told me to add them together) or just one of the two amounts? It seems I read a thread last year about when these amounts are split on the tax return. I am not sure my tax guy gave me the correct answer on what to do in terms of FAFSA and PROFILE reporting. I want to do this correctly. Thanks in advance for your help!</p>
<p>FAFSA:</p>
<p>Your tax guy’s software correctly showed the $2,500 credit (it is $1,000 refundable and $1,500 nonrefundable - this means even if you had zero tax liability you could get $1,000 back).</p>
<p>You report the $1,500 nonrefundable amount (not the whole $2,500 amount) on the FAFSA since the $1,500 is what was subtracted on the tax form to get your tax liability (line 55 Form 1040).</p>
<p>The FAFSA does not penalize you for having received a $1,500 Amer Op Credit when it considers your federal tax liability. Since $1,500 is what was credited against your liability (line 49, Form 1040), that’s the number you use on the FAFSA.</p>
<p>Thanks for the information, Madison! I appreciate your reply. Have a great weekend!</p>
<p>Hi - I think I might have been the one you were referring to from last year with confusion about the credit being split and how to report it on FAFSA. Last year - I initially got conflicting advice from the FAFSA Help line and from my son’s university causing me to change it from $1500 to $2500 and then back to $1500 and so forth. The above poster is correct - $1500 is the amount for FAFSA. I think the direction was clearer this year as they gave the line number. And your tax guy did it correctly with the $2500 credit being split into 2 pieces on the tax return.</p>
<p>Thanks, Rockville mom!</p>