Significantly Reduce or Zero Out Course Material Costs with the American Opportunity Tax Credit

College stores support nationwide #taxbreaks4students campaign to encourage students and families to see if they qualify for educational tax breaks and save receipts from eligible course material purchases.

OBERLIN, OH (March 19, 2024) – As part of the National Association of College Stores (NACS) ongoing support for the #TaxBreaks4Students campaign, NACS reminds students and families to find out if they qualify for educational tax breaks such as the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC).

While books and supplies costs are at a 23 year low, for students who still have out-of-pocket costs for required course materials and tuition and fees, the AOTC can significantly reduce or eliminate out-of-pocket costs of course materials.

College stores across the country are working to raise awareness of the value of the tax credits for students and families and the importance of saving receipts for qualified course material expenditures to appropriately claim tax credits and retain such records for the IRS.

“Millions of students and their families who are struggling to pay for college may not realize that they’re eligible to take advantage of education tax benefits whether they receive financial aid or not,” said Richard Hershman, NACS’ vice president of government relations. “The AOTC provides up to $2,500 a year of the out-of-pocket cost of tuition and qualified education expenses including books, supplies, and equipment needed for a course of study, paid during the taxable year for the first four years of college. Forty percent of the credit is refundable, with the maximum refundable amount of $1,000 allowing taxpayers with zero tax liability to receive a refund.”

The credit can significantly offset or eliminate what was spent on required course materials, supplies, and equipment for the average student in their first four years of college. These are benefits students and their families should be aware of, Hershman said.

Key features of the AOTC include:

  • Up to $2,500 per student a year for tuition, fees and required course materials.
  • Don’t make enough to owe taxes? You STILL may qualify for up to $1,000.
  • For students who are at least half-time in a degree or certificate program, or a program leading to recognized education credential.
  • Can be used for four years of higher education as long as the school is eligible to participate in a federal student aid program administered by the U.S. Education Department.
  • Available to individuals with less than $90,000 or joint return filers with less than $180,000 in income.
  • Are you an undergraduate? Job training student? Apprentice? See if you qualify

Students not qualifying for the AOTC may qualify instead for up to $2,500 per year for out-of-pocket tuition and fees, per return, through the Lifetime Learning Credit. The Lifetime Learning Tax Credit only allows for out of pocket tuition and fee expenses and books and supplies only when they are included in tuition and fees as a condition of enrollment. The campaign urges students to check out IRS resources to see whether they qualify for these important benefits.


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