Question
What is the nonrefundable portion of the American Opportunity Tax Credit (AOTC) that the Davises qualify to claim?
Answers
GPT-4o mini
The American Opportunity Tax Credit (AOTC) allows eligible students and their families to claim a credit for qualified education expenses for the first four years of higher education. The AOTC can provide a maximum credit of up to $2,500 per eligible student for the tax year, with 40% of the credit being refundable.
This means that the nonrefundable portion of the AOTC is 60% of the maximum credit. Therefore, the nonrefundable portion of the AOTC would be:
- Maximum AOTC: $2,500
- Nonrefundable portion (60%): $2,500 * 0.60 = $1,500
So, the nonrefundable portion of the AOTC that the Davises qualify to claim, assuming they are eligible for the full credit, would be $1,500.
Keep in mind that eligibility for the AOTC is based on various factors including income limits, enrollment status, and qualifying expenses, so the actual amount they can claim might vary.
This means that the nonrefundable portion of the AOTC is 60% of the maximum credit. Therefore, the nonrefundable portion of the AOTC would be:
- Maximum AOTC: $2,500
- Nonrefundable portion (60%): $2,500 * 0.60 = $1,500
So, the nonrefundable portion of the AOTC that the Davises qualify to claim, assuming they are eligible for the full credit, would be $1,500.
Keep in mind that eligibility for the AOTC is based on various factors including income limits, enrollment status, and qualifying expenses, so the actual amount they can claim might vary.