2026 American Opportunity Credit
For 2026, 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 2026-01-01Source: Education credits - AOTC and LLC (IRS)Verified 2026-09-01
Compared with 2025
Every figure on this page is unchanged from 2025.
| Item | 2025 | 2026 | 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 the American Opportunity Credit for qualified education expenses paid in 2026.
What changed this year, and why
The maximum American Opportunity Credit for 2026 is $2,500 per eligible student.
Common questions
- What is the maximum American Opportunity Credit for 2026?
- The maximum credit is $2,500 per eligible student for 2026.
- Did the maximum credit change from 2025?
- No. The maximum credit for 2026 is $2,500, the same as it was for 2025.
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 American Opportunity Credit in 2026, 40% of the credit is refundable. This means that portion can be paid to the taxpayer as a refund even if they owe no federal income tax. The rest of the credit is non-refundable and can only reduce tax liability. With a maximum credit of $2,500 per eligible student, the refundable portion makes this credit more valuable than fully non-refundable education credits, because it can result in a payment to the taxpayer even when their tax liability is zero.
AOTC is partially refundable, 40%.
Education credits - AOTC and LLC (IRS)
The income at which you lose the credit entirely
The credit begins to phase out once your modified adjusted gross income (MAGI) reaches a certain level, and it is lost entirely once MAGI exceeds the upper limit. For a single filer, the credit is reduced once MAGI reaches $90,000 and is gone entirely above that amount; for married couples filing jointly, the phase-out begins at $180,000 and ends at that same upper bound. If you are married filing separately, you cannot claim the credit at all regardless of income. The income test applies to the taxpayer claiming the credit, not to the student, so a student with high earnings can still be claimed by an eligible parent whose MAGI is below the limit.
Your modified adjusted gross income (MAGI), is over $90,000 ($180,000 for joint filers).
Education credits - AOTC and LLC (IRS)
The same student can be claimed in only four tax years
A student may be claimed for the American Opportunity Credit in only 4 tax years total. Once four years of credits have been taken, whether or not they were consecutive, neither the student nor anyone else can claim the credit for that student in any later year. The rule is measured by the number of tax years in which the credit was previously claimed for that student, not by the student's progress toward a degree or the number of academic years completed. Even if the student is still enrolled and continues to pay qualified expenses after those four years, no further AOTC is available.
AOTC is available ONLY for 4 years per eligible student.
Education credits - AOTC and LLC (IRS)
What counts as having finished the first four years
To qualify for the credit, the student must not have completed the first 4 years of postsecondary education. The four years are counted as academic years, not tax years, and they do not have to be consecutive. Time spent in high school taking college courses, or credits earned before enrolling in a degree program, may count toward the total. Once the student has finished those first 4 years of postsecondary education, the American Opportunity Credit is no longer available for that student, even if the student continues toward a graduate degree or is still paying for undergraduate courses beyond the fourth year.
AOTC is available ONLY if the student hasn’t completed the first 4 years of postsecondary education.
Education credits - AOTC and LLC (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 at an eligible educational institution for at least one academic period that begins during the tax year. Half-time enrollment generally means the student is taking at least half the normal full-time workload for the course of study they are pursuing, as defined by the school. This requirement applies only to the American Opportunity Credit, not to the Lifetime Learning Credit. The academic period can be a semester, trimester, quarter, or any other period of study recognized by the institution. Students who are enrolled less than half-time, or who are taking courses merely to acquire or improve job skills without pursuing a credential, do not meet this threshold and are ineligible for the American Opportunity Credit for that year.
The student must be enrolled at least half-time for at least one academic period 1 that begins during 2025 (or the first 3 months of 2026 if the qualified expenses were paid in 2025.)
Education credits - AOTC and LLC (IRS)
A felony drug conviction disqualifies the student
A student who has been convicted of a felony for possessing or distributing a controlled substance is disqualified from the American Opportunity Credit for the tax year in question. The disqualification applies to state and federal convictions alike. However, this bar is specific to AOTC; a felony drug conviction does not make the student ineligible for the Lifetime Learning Credit. Because the rule looks at the student's own criminal record, a parent claiming the credit for a dependent child must verify that the student has no such conviction. The disqualification is evaluated separately each year, so a student who was ineligible in one year may be eligible again in a later year if the circumstances change.
The student cannot have been convicted of a state or federal felony for possessing or distributing a controlled substance.
Education credits - AOTC and LLC (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.
Education credits - AOTC and LLC (IRS)
- Maximum credit
AOTC allows a credit up to $2,500 per eligible student.
- Expenses credited in full
100% of the first $2,000 and 25% of the next $2,000.
- Further expenses credited in part
100% of the first $2,000 and 25% of the next $2,000.
- Rate on the further expenses
100% of the first $2,000 and 25% of the next $2,000.