This filing season, many parents and students will be able to defray higher education expenses somewhat with help from a federal tax credit that was part of last year's stimulus bill.
An announcement from Pennsylvania Democratic Congressman Chaka Fattah, the author of the provision, reminded people in lower and middle income tax brackets to prepare their documents and receipts to take advantage of the $2,500 American Opportunity Tax Credit.
"We need to raise the bar of expectation for all of our young people and other aspiring students - and the American Opportunity Tax Credit is a significant step toward making college affordable to all," said Fattah.
The government budgeted up to $14 billion for the credit, which covers up to $2,500 in eligible expenses for out-of-pocket educational expenses paid for during the calendar year 2009. The credit refundable up to $1,000.
"A student can now claim this credit four years instead of two," said John Hewitt, CEO of Liberty Tax Service.
Fattah's announcement noted that the eligible expenses under the tax credit generally apply to things like books, tuitions, fees, and related expenses that may not be typically covered under scholarships and grants. Students can get more information about the credit at the IRS website or by consulting with a professional tax preparer.
Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.