What is the American opportunity tax credit?
The American opportunity tax credit relates to qualified educational expenses that a family pays for an eligible student. The credit is only applicable to education expenses paid for the first four years of higher education.
The credit is limited to $2,500 per eligible student. If the credit brings the amount of tax you owe to zero, you can have 40 percent of any remaining amount of the credit (up to $1,000) refunded to you.
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You might also be interested in... What is a refundable tax credit?
A refundable tax credit is one of the two types of personal tax credits that individual taxpayers can qualify for. A refundable tax credit means that a taxpayer can get a refund, even if it is more than the taxpayers tax liability. As you can see in the example below, the taxpayers tax liability is...
What is the child tax credit?
The child tax credit is a type of refundable personal tax credit. Basically, taxpayers will receive a tax credit of $2,000 for each qualifying child. Qualifying child must be under 17 years old. There are a number of phase outs and limitations, so be sure to consult with your tax professional before applying the refundable...
What is the earned income credit?
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What is a refundable tax credit?
A refundable tax credit is one of the two types of personal tax credits that individual taxpayers can qualify for. A refundable tax credit means that a taxpayer can get a refund, even if it is more than the taxpayers tax liability. As you can see in the example below, the taxpayers tax liability is...
What is the child tax credit?
The child tax credit is a type of refundable personal tax credit. Basically, taxpayers will receive a tax credit of $2,000 for each qualifying child. Qualifying child must be under 17 years old. There are a number of phase outs and limitations, so be sure to consult with your tax professional before applying the refundable...
What is the earned income credit?
The earned income credit is offered to low to moderate income working families (especially those with children). The earned income credit is a refundable tax credit, which means that a family can qualify for the credit even if their taxable income is $0. Criteria for taxpayers who qualify for the earned income credit are as...
