2023 American Opportunity Credit
For 2023, 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 2023-01-01Source: Publication 970 (2023), Tax Benefits for Education (IRS)Verified 2026-09-03
Compared with 2022
Every figure on this page is unchanged from 2022.
| Item | 2022 | 2023 | 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 claiming education credits for 2023
What changed this year, and why
Initial publication of the 2023 American Opportunity Credit information
Common questions
- What is the maximum American Opportunity Credit for 2023?
- The maximum credit is $2,500 per eligible student for 2023.
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 2023 American Opportunity Credit, up to 40% of the total credit amount may be claimed as a refundable credit, while the remaining portion is nonrefundable. The refundable portion means that even if a taxpayer owes no federal income tax for the year, the IRS will refund that portion as a payment. The nonrefundable portion can only be used to reduce any tax liability the taxpayer owes; it cannot generate a refund beyond zero tax. Because the maximum credit per eligible student is $2,500, the refundable component can reach 40% of that total, with the balance serving only to offset tax owed. This structure allows taxpayers with little or no tax liability to still receive a meaningful benefit from the credit, though the full value of the credit is realized only by those with sufficient tax liability to use both the refundable and nonrefundable portions.
Refundable or nonrefundable 40% of credit may be refundable; the rest is nonrefundable
Publication 970 (2023), Tax Benefits for Education (IRS)
The income at which you lose the credit entirely
The American Opportunity Credit phases out as modified adjusted gross income (MAGI) rises. If MAGI reaches $90,000 for a single filer or $180,000 for a married couple filing jointly, the credit is reduced to zero and no amount can be claimed. The credit is fully available below these thresholds and gradually eliminated within the phase-out range that leads up to them. These income limits apply per return, not per student. A taxpayer whose income exceeds the limit cannot claim the credit for any eligible student, even if the student meets all other requirements. The lifetime learning credit has the same MAGI limits, so taxpayers above these levels cannot claim either education credit for the year.
You can't claim the American opportunity credit for 2023 if any of the following apply. • Your filing status is married filing separately. • You are claimed as a dependent on another person's tax return, such as your parent's return. See Who Can Claim a Dependent's Expenses, later. • Your modified adjusted gross income (MAGI) is $90,000 or more ($180,000 or more if married filing jointly).
Publication 970 (2023), Tax Benefits for Education (IRS)
The same student can be claimed in only four tax years
A student may be counted toward the American Opportunity Credit for no more than 4 tax years in total. Once qualified expenses have been used to figure the credit for the same student in 4 prior tax years, no further credit is allowed for that student in any later year. The 4-year count follows the student regardless of who claims the credit - parents, the student, or someone else. All years count even if different people claimed the credit in different years. The rule applies per student, so a family with multiple children in college can claim the credit for each child for up to 4 years independently.
The student didn't have expenses that were used to figure an American opportunity credit in any 4 earlier tax years.
Publication 970 (2023), Tax Benefits for Education (IRS)
What counts as having finished the first four years
The American Opportunity Credit is available only for students who have not yet completed the first four years of postsecondary education. Completion is determined by the educational institution based on academic credit awarded for coursework completed before the tax year. The four-year measure counts only credit earned through actual coursework; academic credit awarded solely based on proficiency examinations is disregarded. A student classified by their institution as a freshman, sophomore, junior, or senior has not completed the first four years and remains eligible. Once the institution has awarded four years of credit for prior coursework, the student is no longer an eligible student for this credit, even if they have not yet earned a degree.
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 2023.
Publication 970 (2023), Tax Benefits for Education (IRS)
Half-time enrollment in a degree program is required
To claim the American Opportunity Credit, the student must be 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 the tax year. The half-time standard is set by the educational institution and may differ from full-time enrollment. A student taking only one class per term, or attending without pursuing a formal program, does not meet this requirement. The enrollment must be in a recognized educational program; vocational or avocational courses alone do not qualify unless they lead to a credential. The requirement must be met for at least one academic period during the year, not for the entire year.
the student was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential.
Publication 970 (2023), Tax Benefits for Education (IRS)
A felony drug conviction disqualifies the student
A student is ineligible for the American Opportunity Credit if the student has been convicted of any federal or state felony for possessing or distributing a controlled substance as of the end of the tax year. The conviction must be final by December 31; a pending charge or accusation that has not resulted in a conviction does not disqualify the student. This rule applies regardless of the student's academic standing, enrollment status, or income level. Even if all other requirements are met - including completion of fewer than four years of postsecondary education and at least half-time enrollment in a degree program - the credit cannot be claimed for any student with a qualifying felony drug conviction.
The student hasn't been convicted of any federal or state felony for possessing or distributing a controlled substance as of the end of 2023.
Publication 970 (2023), Tax Benefits for Education (IRS)
Pay in December for a term that starts by March, and it counts in the earlier year
Normally, education expenses count toward the American opportunity credit only if they pay for an academic period that falls within the same tax year. The IRS allows an exception for early payments made at the end of one year for a term that starts very early in the next year. Specifically, if you pay qualified tuition or related expenses in December 2023 for a semester that begins in January, February, or March 2024, those expenses are treated as if they were paid for an academic period beginning in 2023. This means you can include the payment when calculating your 2023 credit, even though the classes do not start until the following calendar year. The rule applies only when the payment is actually made in the earlier year; simply owing the money is not enough. It lets families who settle spring-semester bills in December claim the credit sooner rather than waiting until they file for the year in which the classes actually take place. The maximum credit remains $2,500, and the $2,000 in expenses that are credited in full plus the further $2,000 in expenses credited at 25% continue to apply.
For 2023, treat an academic period beginning in the first 3 months of 2024 as if it began in 2023 if qualified education expenses for the student were paid in 2023 for that academic period.
Publication 970 (2023), Tax Benefits for Education (IRS)
You must provide the school's EIN on Form 8863
When filing for the 2023 American Opportunity Credit, you must list the Employer Identification Number of the school your student attended on Form 8863. The IRS needs this number to match your claim to the institution that issued the Form 1098-T showing the tuition you paid. You can find the EIN on the Form 1098-T the school sends you, or by contacting the school's financial-aid or bursar's office directly. If you cannot locate the number, the IRS may reject or delay processing of your return because the credit claim will be incomplete. The EIN is separate from your own Social Security Number or ITIN, which is also required; both the student's TIN and the school's EIN must appear on the forms supporting the credit. Failure to include the EIN does not reduce the credit amount itself, but it can prevent the claim from being accepted at all. The credit is worth up to $2,500 per eligible student, based on $2,000 of expenses credited in full and a further $2,000 of expenses credited at 25%.
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 informa- tion from Form 1098-T or the educational institution. See chapter 2.
Publication 970 (2023), Tax Benefits for Education (IRS)
You can claim it for one student and the lifetime learning credit for another in the same year
The 2023 American Opportunity Credit rules let you split education credits across different students in your household. If you have more than one person incurring college costs, you can choose to claim the American Opportunity Credit for one student and the Lifetime Learning Credit for a different student on the same tax return. The expenses of a student for whom you do not claim the American Opportunity Credit can be applied toward the Lifetime Learning Credit instead. This flexibility recognizes that different students may have different eligibility situations or that spreading the credits across multiple students could produce a larger total benefit. However, you cannot claim both credits on the same student's expenses in the same year; the credits must be allocated to different students. The American Opportunity Credit itself remains based on up to $2,000 of expenses credited in full plus another $2,000 of expenses credited at 25%, producing a maximum credit of $2,500 per eligible student. The Lifetime Learning Credit operates under its own separate dollar limits and eligibility rules.
If you pay qualified education expenses for a student (or students) for whom you don't claim the American op- portunity credit, you can use the adjusted qualified educa- tion expenses of that student (or those students) in figur- ing your lifetime learning credit. 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 (2023), Tax Benefits for Education (IRS)
Claim it when you are not eligible, and you can be banned for years
If you claim the American Opportunity Credit in 2023 when you are not eligible, the IRS can ban you from claiming the credit in future years. The ban lasts for 2 years if the improper claim was due to reckless or intentional disregard of the rules, or 10 years if it was due to fraud. During the ban period, you cannot claim the credit even if you would otherwise meet all the eligibility requirements. The credit itself is worth up to $2,500 per eligible student, based on $2,000 of expenses credited in full and a further $2,000 of expenses credited at 25%. To avoid a ban, ensure you meet all the requirements before claiming the credit, including the half-time enrollment requirement, the student's Social Security number, the absence of a felony drug conviction, and the income limits. The ban applies to the taxpayer who improperly claimed the credit, not to the student for whom it was claimed.
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 chapter 2. Taxpayer identification number (TIN) needed by due date of return.
Publication 970 (2023), Tax Benefits for Education (IRS)
Filing separately from your spouse blocks the credit entirely
The IRS states in Publication 970 that you cannot claim the American opportunity credit for 2023 if your filing status is married filing separately. This is the first of several conditions that each independently block the credit. Even if you paid qualifying tuition and fees and the student met all other tests, choosing the married-filing-separately status on your federal return disqualifies you entirely. The only way for a married couple to claim the credit is to file a joint return. The other conditions that bar the credit include being claimed as a dependent on another person's return, having modified adjusted gross income of $90,000 or more ($180,000 or more for joint filers), and being a nonresident alien for any part of 2023 without electing resident-alion status. The American opportunity credit can reach a maximum of $2,500 per eligible student, calculated as the full amount on the first $2,000 of qualified expenses plus 25% of the next $2,000.
You can't claim the American opportunity credit for 2023 if any of the following apply. • Your filing status is married filing separately.
Publication 970 (2023), 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 (2023), 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 surviving spouse
- 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 surviving spouse