Low-income students are being given a $2,500 tax break under the American Opportunity Tax Credit, which will give students the opportunity to claim textbook purchases, tuition and other fees paid in 2009-10 on their taxes.
Students may claim a maximum credit of $2,500 under this tax break, which is offered under the American Recovery and Reinvestment Act of 2009. Any taxpayer who has a modified adjusted gross income of $80,000 or less and has paid tuition or other expenses is eligible for credit.
“Needy college students and their families are faced with a variety of costs in paying for college,” said Richard Hershman, National Association of College Stores director of government relations in a press release. “While textbooks and other course materials are both required and vital to a student’s academic success, they are rarely covered by traditional financial aid. With the enactment of the American Recovery and Reinvestment Act of 2009, that oversight is no more.”
This tax credit is a continuation of the previous Hope Credit. Unlike the Hope Credit, the American Opportunity Tax Credit reaches out to a larger variety of taxpayers, including those with higher incomes and those who owe no tax.
The American Opportunity Tax Credit also allows credit to be claimed for four years of higher education as opposed to two and lists required course materials as a qualifying expense.
The first $2,000 spent on tuition, fees and other course materials will be credited 100 percent. The next $2,000 will be credited at 25 percent.
Although the credit is designed to be available for four years of higher education, it must be approved by Congress in December.
“Combined with proactive campus-based efforts underway to make course materials more affordable for students, the new tax credits will go a long way to help students succeed in school and in the economy,” Hershman said.
NACS represents more than 3,100 member stores in the collegiate retailing industry.
For more information, visit the NACS Web site.