American Opportunity Tax Credit (Expanded Hope Credit) for Tax Year 2009

The Hope Credit has been renamed the "American Opportunity Tax Credit." The credit can be up to $2,500 and up to $1,000 of that credit amount may be refundable. The credit now applies to the first 4 years of post-secondary education in a degree or certificate program.

The credit is calculated by taking 100% of the first $2,000 of qualified educational expenses and 25% of the next $2,000 of such expenses.

For tax year 2009, the credit is gradually reduced if your modified adjusted gross income (MAGI) exceeds $80,000 ($160,000 if married filing a joint return) and is completely eliminated if your MAGI exceeds $90,000 ($180,000 if married filing a joint return).

For more information on education credits, click here.

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