2023 American Opportunity Credit
For 2023, the American Opportunity Credit is $2,500 (Maximum credit), $2,000 (Expenses credited in full), $2,000 (Further expenses credited in part) and 25% (Rate on the further expenses).
Effective 2023-01-01Source: Publication 970 (2023), Tax Benefits for Education (IRS)Verified 2026-09-01
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%) |
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.
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)
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