What is the maximum amount of the American Opportunity Tax Credit per eligible student?

The American Opportunity Tax Credit (AOTC) provides significant financial assistance to eligible students, allowing them to reduce the amount of their tax liability based on qualified education expenses. The maximum amount of the AOTC is $2,500 per eligible student for their first four years of higher education. This credit is designed to help with costs such as tuition, fees, and course materials.

It is partially refundable, meaning that even if taxpayers do not owe any taxes, they can receive up to 40% of the credit (a maximum of $1,000) as a refund. The credit is available to both undergraduate students and their families, subject to income limitations. Understanding the specifics of the AOTC, including the maximum amount, is crucial for students and families planning for education expenses and tax implications.