2020 American Opportunity Credit
For 2020, 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 2020-01-01Source: Publication 970 (2020), Tax Benefits for Education (IRS)Verified 2026-09-03
Compared with 2019
Every figure on this page is unchanged from 2019.
| Item | 2019 | 2020 | 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 during the 2020 tax year
What changed this year, and why
The American Opportunity Credit for 2020 allows a maximum credit of $2,500 per eligible student. The first $2,000 of qualified education expenses are credited in full, and 25% of the next $2,000 of qualified education expenses are credited, per eligible student.
Common questions
- How is the American Opportunity Credit calculated?
- The first $2,000 of qualified education expenses per eligible student are credited in full, and 25% of the next $2,000 is credited, 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
For the 2020 American Opportunity Credit, 40% of the credit may be refundable, while the rest is nonrefundable. A refundable portion means that if the credit exceeds your total tax liability, you can receive that share of the credit as a refund even if you owe no tax. The nonrefundable share can only reduce your tax bill to zero and cannot generate a refund beyond what you owe. The maximum credit is $2,500 per eligible student. The credit is computed by claiming the first $2,000 of qualified expenses in full and then applying a 25% rate to the next $2,000 of expenses. Taxpayers with little or no income tax liability can still benefit because the refundable portion reaches them as a cash payment. If you owe no tax at all, you may still receive the refundable share back.
Refundable or nonrefundable 40% of credit may be refundable; the rest is nonrefundable
Publication 970 (2020), Tax Benefits for Education (IRS)
The income at which you lose the credit entirely
For the 2020 American Opportunity Credit, your modified adjusted gross income (MAGI) must be below certain thresholds. If your MAGI is $90,000 or more as a single filer, head of household, or qualifying widow(er), or $180,000 or more if married filing jointly, you cannot claim the credit at all. These are the phaseout limits where the credit is reduced to zero. Between these amounts and lower thresholds, the credit phases out gradually. The credit itself is worth up to $2,500 per eligible student, calculated as the full amount of the first $2,000 in qualified education expenses plus 25% of the next $2,000 in expenses. Taxpayers whose income exceeds these limits lose the credit entirely, regardless of how much they spent on education. Married couples filing separately cannot claim the credit at any income level.
Your modified adjusted gross income (MAGI) is $90,000 or more ($180,000 or more if married filing jointly).
Publication 970 (2020), Tax Benefits for Education (IRS)
The same student can be claimed in only four tax years
You cannot claim the American Opportunity Credit for the same student in more than four tax years. The student must not have had expenses that were used to figure the credit in any four earlier tax years. This means the credit is available for a maximum of four tax years per student over their entire educational career. Once the credit has been claimed for four prior tax years, the student no longer qualifies as an eligible student regardless of whether they are still pursuing their education. This limit applies even if the expenses were claimed by different taxpayers in different years, such as parents claiming the credit in some years and the student claiming it in others. The four-year limit is a lifetime cap tied to the individual student.
The student didn't have expenses that were used to figure an American opportunity credit in any 4 earlier tax years.
Publication 970 (2020), Tax Benefits for Education (IRS)
What counts as having finished the first four years
To claim the American Opportunity Credit, the student must not have completed the first four years of postsecondary education before the tax year. A student has completed the first 4 years of postsecondary education if the institution at which the student is enrolled awards the student 4 years of academic credit at that institution for coursework completed before 2020. This determination is made by the eligible educational institution based on its own academic standards. Academic credit awarded solely because of the student's performance on proficiency examinations is not counted toward this four-year completion test. Generally, this means the credit is available for students in their freshman through senior years of college. Once a student has been classified as having completed four years, they are no longer an eligible student for the credit, even if they continue to take classes or pursue graduate-level work.
Completion of first 4 years. A student has completed the first 4 years of postsecondary education if the institu- tion at which the student is enrolled awards the student 4 years of academic credit at that institution for coursework completed by the student before 2020.
Publication 970 (2020), Tax Benefits for Education (IRS)
Half-time enrollment in a degree program is required
Half-time enrollment is determined by the educational institution based on at least one-half the normal full-time workload for the student's course of study. Students enrolled less than half-time cannot qualify for this credit, though they may be eligible for the Lifetime Learning Credit. The program must lead to a recognized credential; general education courses without a degree or certificate objective do not qualify. The credit is worth up to $2,500 per eligible student, with the first $2,000 of qualified expenses credited in full and the next $2,000 credited at 25%.
the student was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential.
Publication 970 (2020), Tax Benefits for Education (IRS)
A felony drug conviction disqualifies the student
A student cannot qualify for the American Opportunity Credit if the student has been convicted of a federal or state felony for possessing or distributing a controlled substance as of the end of 2020. This disqualification applies regardless of when the conviction occurred. Even if the student meets all other requirements, including enrollment at least half-time in a degree program and not having completed four years of postsecondary education, a felony drug conviction makes the student ineligible for this credit. The student may still qualify for the Lifetime Learning Credit, which does not have this disqualification. The American Opportunity Credit is worth up to $2,500 per eligible student, calculated as the full amount of the first $2,000 in qualified education expenses plus 25% of the next $2,000 in expenses.
con- victed of a federal or state felony for possessing or distributing a controlled substance.
Publication 970 (2020), Tax Benefits for Education (IRS)
Pay in December for a term that starts by March, and it counts in the earlier year
Which tax year a payment counts toward depends on when the academic period it pays for starts, not on the calendar year you wrote the check. If you paid qualified education expenses in 2020 for an academic period that begins in the first three months of 2021, you treat that period as if it began in 2020 - meaning the expense is usable for your 2020 credit. You cannot instead wait and claim it against the later year, and you cannot split it between the two. A payment for a term that starts in April 2021 or later does not qualify for this treatment and stays tied to whichever year the term actually begins in.
For 2020, treat an academic period beginning in the first 3 months of 2021 as if it began in 2020 if qualified education expenses for the student were paid in 2020 for that academic period.
Publication 970 (2020), Tax Benefits for Education (IRS)
You must provide the school's EIN on Form 8863
For the 2020 American Opportunity Credit, the IRS requires taxpayers to provide the educational institution's employer identification number on Form 8863. This EIN is typically found on Form 1098-T, the tuition statement that eligible educational institutions provide to students. If the form doesn't include the EIN, taxpayers should obtain it directly from the educational institution. This requirement applies specifically to the American Opportunity Credit and must be satisfied when filing the claim. Without the institution's EIN on Form 8863, the credit cannot be claimed. The requirement ensures proper documentation and verification of eligible educational institutions. Taxpayers should keep records of where they obtained the EIN information in case of questions from the IRS. This is one of several requirements for claiming the American Opportunity Credit, which provides a maximum credit of $2,500 per eligible student based on qualified education expenses.
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 (2020), Tax Benefits for Education (IRS)
You can claim it for one student and the lifetime learning credit for another in the same year
For the 2020 American Opportunity Credit, taxpayers can claim this credit for one student and the Lifetime Learning Credit for another student in the same tax year. This flexibility allows families with multiple students in higher education to optimize their education tax benefits. The American Opportunity Credit is calculated on a per-student, per-year basis, meaning each eligible student can generate their own credit. If you pay qualified education expenses for multiple students but don't claim the American Opportunity Credit for all of them, you can use the adjusted qualified education expenses of those other students when figuring your Lifetime Learning Credit. This means you can strategically allocate which credit to claim for each student based on their individual circumstances and expenses. The American Opportunity Credit provides up to $2,500 per student, with the first $2,000 of qualified expenses credited in full and a further $2,000 of expenses credited at 25%. Both credits have different eligibility requirements and limitations, so taxpayers should review the rules for each credit when planning their tax strategy.
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 (2020), Tax Benefits for Education (IRS)
Claim it when you are not eligible, and you can be banned for years
For the 2020 American Opportunity Credit, taxpayers who claim the credit when they are not eligible face serious consequences beyond simply owing back taxes and penalties. The IRS can ban taxpayers from claiming the credit for multiple years if they improperly claim it. The length of the ban depends on the taxpayer's conduct. A taxpayer may be banned from claiming the credit for 2 years or 10 years depending on the circumstances. This ban applies in addition to any other penalties or interest that may be assessed. The rule is designed to deter fraudulent or reckless claims of the credit. Taxpayers should ensure they meet all eligibility requirements before claiming the American Opportunity Credit, including that the student be enrolled at least half-time in a program leading to a degree or recognized credential, that the student has not completed the first four years of postsecondary education, and that income levels fall within the allowed range. The credit provides a maximum of $2,500 per eligible student, with the first $2,000 of qualified expenses credited in full and a further $2,000 of expenses credited at 25%.
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 Caution under Introduction below.
Publication 970 (2020), Tax Benefits for Education (IRS)
Filing separately from your spouse blocks the credit entirely
Taxpayers who are married and choose the married filing separately status are completely ineligible for the American Opportunity Credit in 2020. This restriction applies regardless of income level, education expenses, or whether the student meets all other eligibility requirements. The IRS explicitly lists this filing status as one of the conditions that prevents claiming the credit entirely. To qualify for this credit, married couples must file a joint return. The married filing separately status blocks access to the credit even if one spouse paid all the qualified education expenses or if the couple otherwise meets the income thresholds. This rule is specific to the American Opportunity Credit and reflects the tax code's treatment of education credits for married taxpayers who do not file jointly. Other conditions that also disqualify taxpayers from claiming the American Opportunity Credit include being claimed as a dependent on another person's tax return, having modified adjusted gross income at or above $90,000 for single filers or $180,000 for joint filers, or being a nonresident alien without the proper election. The married filing separately restriction stands alongside these other eligibility barriers as a firm disqualification rule for 2020.
You can't claim the American opportunity credit for 2020 if any of the following apply. • Your filing status is married filing separately.
Publication 970 (2020), 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 (2020), 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)