College and University Blog
Obama asks Congress to Make Education Tax Credit Permanent
President Barack Obama has asked Congress to make an educational tax credit permanent in hopes of allowing college students and their families to continue receiving a tax break each year.
“I am calling on Congress to make this tax credit permanent so it’s worth up to $10,000 for four years of college, because we’ve gotta make sure that in good times or bad, our families can invest in their children’s future and in the future of our country,” President Obama said about the American Opportunity Tax Credit in the White House Rose Garden on Wednesday, October 13 where he was joined on stage by college students and their families.
What is the American Opportunity Tax Credit?
The American Opportunity Tax Credit, part of the federal stimulus program which passed shortly after Obama took office, allows families to receive a tax credit of up to $2,500 per student per year for four years, for a total of $10,000 per student.
The $2,500 American Opportunity Tax Credit was created as a $700 per year improvement to the already-existing Hope credit, which offered a $1,800 tax credit for the first two years of post-high school education as opposed to four years.
Who Benefits from this Education Tax Credit?
According to the IRS website a taxpayer who pays qualified tuition and related expenses and whose federal income tax return has a modified adjusted gross income of $80,000 or less ($160,000 or less for joint filers) is eligible for the credit.
The credit is reduced ratably if a taxpayer
Melissa Rhone+
Melissa Rhone earned her Bachelor of Music in Education from the University of Tampa. She resides in the Tampa Bay area and enjoys writing about college, pop culture, and epilepsy awareness.