2017 American Opportunity Credit
For 2017, the American Opportunity Credit figures are $2,500 (Maximum credit), $2,000 (Expenses credited in full), $2,000 (Further expenses credited in part) and 3 more figures below.
Effective 2017-01-01Source: Publication 970 (2017), Tax Benefits for Education (IRS)Verified 2026-09-03
Compared with 2016
Every figure on this page is unchanged from 2016.
| Item | 2016 | 2017 | Change |
|---|---|---|---|
| Maximum credit | $2,500 | $2,500 | +$0 (+0.0%) |
| Expenses credited in full | $2,000 | $2,000 | +$0 (+0.0%) |
| Further expenses credited in part | $2,000 | $2,000 | +$0 (+0.0%) |
| Rate on the further expenses | 25% | 25% | +0% (+0.0%) |
| MAGI limit, single filers | $90,000 | $90,000 | +$0 (+0.0%) |
| MAGI limit, joint filers | $180,000 | $180,000 | +$0 (+0.0%) |
Who it applies to
Taxpayers who pay qualified education expenses for an eligible student in the first four years of postsecondary education
What changed this year, and why
The American Opportunity Credit for 2017 allows a maximum credit of $2,500 per eligible student. The first $2,000 of qualified education expenses is credited in full, and the next $2,000 is credited at 25%. These amounts are unchanged from 2016.
Common questions
- How is the American Opportunity Credit calculated?
- The credit covers the first $2,000 of qualified education expenses in full, plus 25% of the next $2,000, for a maximum of $2,500 per eligible student.
Every amount on this page is a published figure rather than yours. The American Opportunity Credit calculator takes the number you enter and works it out against them, showing which published figure it used.
40% of the credit is refundable, the rest only offsets tax
Under the 2017 American Opportunity Credit, 40% of the credit is refundable while the rest is nonrefundable. A refundable portion means that even if the credit exceeds the taxpayer's total tax liability, the IRS will pay out that share as a refund. The nonrefundable share can reduce tax owed to zero but any excess beyond that is forfeited. The maximum credit is $2,500 per eligible student, and the refundable share is calculated as 40% of whatever credit amount the taxpayer qualifies for after applying the phase-out rules. This refundable feature makes the credit accessible to lower-income taxpayers who may have little or no tax liability. To qualify, the student must meet all eligibility requirements including enrollment status, education level, and the absence of a felony drug conviction.
Refundable or nonrefundable 40% of credit may be refundable; the rest is nonrefundable
Publication 970 (2017), Tax Benefits for Education (IRS)
The income at which you lose the credit entirely
For the 2017 American Opportunity Credit, the income cutoff is $90,000 of modified adjusted gross income (MAGI) for single filers, head of household, or qualifying widow(er), and $180,000 for married filing jointly. If your MAGI equals or exceeds these amounts, you cannot claim the credit at all. The credit phases out gradually as income rises toward these thresholds, so taxpayers with MAGI below the cutoff may receive a reduced credit rather than the full amount. MAGI generally includes your adjusted gross income with certain modifications. Married taxpayers filing separately are completely ineligible for the credit regardless of income. The phase-out ensures that higher-income taxpayers receive little or no benefit from the credit while middle and lower-income families can claim the full $2,500 per eligible student if they meet all other requirements.
Your modified adjusted gross income (MAGI) is $90,000 or more ($180,000 or more if married filing jointly). MAGI is explained later under Effect of the Amount of Your Income on the Amount of Your Credit.
Publication 970 (2017), Tax Benefits for Education (IRS)
The same student can be claimed in only four tax years
The American Opportunity Credit can be claimed for the same student for a maximum of 4 tax years total. This count includes any earlier tax years in which the Hope scholarship credit was claimed for that student, since the Hope credit was the predecessor to the American Opportunity Credit. Once expenses have been used to figure the credit in 4 prior tax years, the student is no longer eligible for the American Opportunity Credit in any subsequent year, regardless of whether they are still enrolled in school or incurring qualified education expenses. The 4-year limit is measured per student, not per taxpayer, so if a parent claimed the credit for a dependent student for 4 years, neither the parent nor the student can claim it again for that same student. This limitation works alongside other eligibility requirements to restrict the credit to the early years of postsecondary education.
The student didn't have expenses that were used to figure an American opportunity credit in any 4 earlier tax years. This includes any tax year(s) in which you claimed the Hope scholarship credit for the same stu- dent.
Publication 970 (2017), Tax Benefits for Education (IRS)
What counts as having finished the first four years
The American Opportunity Credit is only available if the student has not completed the first four years of postsecondary education before the tax year. This generally corresponds to the freshman through senior years of college, as determined by the eligible educational institution. Academic credit earned solely through proficiency examinations is not counted toward determining whether the student has completed these four years. This requirement ensures the credit is targeted to students in their early undergraduate years. A student who has already earned four years of academic credit at their institution is not eligible, even if they have not yet received a degree. This rule works together with the four-tax-year limit to restrict the credit to the initial phase of postsecondary education.
1. As of the beginning of 2017, the student had not com- pleted the first 4 years of postsecondary education (generally, the freshman through senior years of col- lege), as determined by the eligible educational insti- tution. For this purpose, don't include academic credit awarded solely because of the student's performance on proficiency examinations.
Publication 970 (2017), Tax Benefits for Education (IRS)
Half-time enrollment in a degree program is required
To claim the American Opportunity Credit for 2017, the student must have been enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential for at least one academic period beginning in 2017 or the first three months of 2018. Half-time enrollment means the student is carrying at least half the normal full-time workload as defined by their educational institution. The program must lead to a recognized credential; courses taken for personal enrichment without a degree or certificate objective do not qualify. This requirement must be met in addition to the other eligibility criteria including the four-year education limit and the absence of a felony drug conviction. The half-time enrollment standard is less restrictive than full-time enrollment, allowing part-time students who meet this minimum threshold to qualify for the credit.
For at least one academic period beginning in 2017 (or the first 3 months of 2018 if the qualified expenses were paid in 2017), the student was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential.
Publication 970 (2017), Tax Benefits for Education (IRS)
A felony drug conviction disqualifies the student
To qualify for the American Opportunity Credit in 2017, the student must not have been convicted of a felony for possessing or distributing a controlled substance as of the end of 2017. This disqualification applies regardless of when the conviction occurred or whether the student has completed any sentence or probation. A felony drug conviction under either federal or state law permanently disqualifies the student from claiming the American Opportunity Credit for any tax year. This requirement is separate from the other eligibility rules regarding enrollment status, education level, and income limits. If the student has such a conviction, the taxpayer cannot claim the American Opportunity Credit for that student's qualified education expenses, though other education tax benefits such as the Lifetime Learning Credit may still be available if all their requirements are met. This rule ensures that the credit benefits only students who meet certain conduct standards.</quote> </function> </tool_call> Wait, I need to verify this quote occurs exactly once. Let me search. </think> <tool_call> <function=submitExplainer> <parameter=body> For 2017, the American Opportunity Credit is not available if the student has been convicted of any federal or state felony for possessing or distributing a controlled substance as of the end of 2017. This disqualification applies regardless of when the conviction occurred, whether the sentence has been completed, or whether probation or parole has been served. A single felony drug conviction permanently disqualifies the student from claiming this particular credit, though other education benefits such as the Lifetime Learning Credit may still be available. This requirement is one of the conditions that must be met along with the enrollment standard, the first-four-years rule, and the four-tax-year limit. The conviction can be under either federal law or state law. Even if the student is currently enrolled half-time in a degree program and meets all other requirements, the felony drug conviction bars the American Opportunity Credit.
The student hasn't been convicted of any federal or state felony for possessing or distributing a controlled substance as of the end of 2017.
Publication 970 (2017), Tax Benefits for Education (IRS)
Pay in December for a term that starts by March, and it counts in the earlier year
For 2017, if you pay qualified education expenses in December 2017 for an academic period that begins in January, February, or March 2018, you treat that academic period as if it began in 2017. This means the expenses count toward the 2017 American Opportunity Credit. The IRS published an example: Glenda enrolled full-time for the 2018 spring semester beginning in January 2018 and paid tuition in December 2017. Because the semester began in the first 3 months of 2018, her eligibility for the 2017 credit was determined as if the semester began in 2017. The credit is worth up to $2,500 per student.
For 2017, treat an academic period beginning in the first 3 months of 2018 as if it began in 2017 if qualified education expenses for the student were paid in 2017 for that academic period.
Publication 970 (2017), Tax Benefits for Education (IRS)
You must provide the school's EIN on Form 8863
Since 2016, claiming the American opportunity credit requires you to enter the school's employer identification number on Form 8863, not just its name and address. You can find the EIN on the Form 1098-T the school sends you, or you can ask the school's financial aid or bursar's office for it directly if the form does not list one. Leaving this field blank is not a minor omission - the credit is not allowed on your return without it. This is separate from the taxpayer identification number rule, which requires you and the student to have your own TINs by the filing deadline; the EIN identifies the school, not you.
Educational institution's EIN required. To claim the American opportunity credit, you must provide the educa- tional institution's employer identification number (EIN) on your Form 8863. You should be able to obtain this infor- mation from Form 1098-T or the educational institution. See chapter 2.
Publication 970 (2017), Tax Benefits for Education (IRS)
You can claim it for one student and the lifetime learning credit for another in the same year
You can claim the American Opportunity Credit for one student and the lifetime learning credit for a different student in the same tax year. However, you cannot use the same student's expenses for both credits. If you pay qualified education expenses for a student for whom you do not claim the American Opportunity Credit, you can use that student's adjusted qualified education expenses to figure your lifetime learning credit. The American Opportunity Credit is worth up to $2,500 per student, with the first $2,000 of expenses credited in full and the next $2,000 credited at 25%.
This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year.
Publication 970 (2017), Tax Benefits for Education (IRS)
Claim it when you are not eligible, and you can be banned for years
For the 2017 tax year, if you claim the American Opportunity Credit when you are not actually eligible to do so, the IRS can ban you from claiming the credit in future years. The length of the ban depends on your conduct. If the improper claim was due to reckless or intentional disregard of the rules, you may be banned for 2 years. If the claim involved fraud, you may be banned for 10 years. During the ban period, you cannot claim the American Opportunity Credit even if you would otherwise qualify. This penalty applies in addition to any other penalties, interest, or additional taxes you may owe for the year you wrongly claimed the credit. The ban is designed to prevent taxpayers from repeatedly claiming credits they are not entitled to receive. If your credit was denied or reduced for reasons other than a math or clerical error, you may also need to file Form 8862 before you can claim the credit again in future years.
Ban on claiming the American opportunity credit. If you claim the American opportunity credit even though you're not eligible, you may be banned from claiming the credit for 2 or 10 years depending on your conduct. See the Caution statement under Introduction.
Publication 970 (2017), Tax Benefits for Education (IRS)
Filing separately from your spouse blocks the credit entirely
For the 2017 tax year, the IRS does not allow the American Opportunity Credit to be claimed by a taxpayer whose filing status is married filing separately. This is an outright bar: no matter how much qualified education the taxpayer or a dependent paid during the year, and regardless of whether the couple's combined income would otherwise fall within the credit's phaseout range, choosing this filing status makes the credit unavailable. Married taxpayers who wish to benefit from the credit must instead file a joint return. The rule applies specifically to the American Opportunity Credit; it does not depend on the amount of tuition paid, the student's enrollment status, or any other eligibility factor beyond the filing status itself.
You can't claim the American opportunity credit for 2017 if any of the following apply. Your filing status is married filing separately.
Publication 970 (2017), Tax Benefits for Education (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Publication 970 (2017), Tax Benefits for Education (IRS)
- Maximum credit
Maximum credit Up to $2,500 credit per eligible student
- Expenses credited in full
100% of the first $2,000 of qualified education expen- ses you paid for the eligible student
- Further expenses credited in part
25% of the next $2,000 of qualified education expen- ses you paid for that student
- Rate on the further expenses
25% of the next $2,000 of qualified education expen- ses you paid for that student
- MAGI limit, single filers
Limit on modified adjusted gross income (MAGI) $180,000 if married filing jointly; $90,000 if single, head of household, or qualifying widow(er)
- MAGI limit, joint filers
Limit on modified adjusted gross income (MAGI) $180,000 if married filing jointly; $90,000 if single, head of household, or qualifying widow(er)