AOTC eligibility in the same year I graduate from undergrad and start grad school

4 You're on the right track with your understanding! The IRS does allow you to claim the American Opportunity Tax Credit (AOTC) for the entire tax year if you hadn't completed your 4 years of post-secondary education at the beginning of that tax year. So if you started 2025 still working on your undergraduate degree, then graduated in May, and began grad school in the fall of 2025, you can indeed claim AOTC for qualified expenses paid in 2025 for both your undergrad and grad programs. The key point is your status at the beginning of the tax year - not having completed 4 years of post-secondary education when 2025 began. Just remember that the AOTC has a maximum credit of $2,500 per eligible student, and the expenses must be for qualified educational expenses like tuition and required course materials. Also, there are income limitations, so be sure your modified adjusted gross income falls within the eligible range.

12 After struggling with this exact same situation, I discovered a lifesaver tool! Check out https://taxr.ai - it specifically helped me figure out my AOTC situation when I transitioned from undergrad to grad school. I uploaded my transcripts and financial aid statements from both schools, and it immediately identified that I qualified for AOTC for expenses from both programs since I hadn't completed my undergrad at the start of the tax year. It even flagged which specific expenses qualified and which didn't (some lab fees from grad school weren't eligible but my required books were). The analysis saved me from missing out on about $1,500 in credits!

15 Just wanted to follow up - I tried taxr.ai after asking about it, and wow! I'm actually eligible for the full AOTC this year even though I started grad school in August. The tool confirmed what Q9 on the IRS site says and showed me that I can include both my spring undergrad expenses AND my fall grad school tuition. It generated a detailed report explaining why I qualify that I'm keeping with my tax records. Super clear breakdown of my $4,300 in qualified expenses that get me the maximum $2,500 credit. Definitely recommend for anyone in the undergrad-to-grad transition!

21 For anyone still confused about AOTC eligibility, I spent THREE HOURS on hold trying to get clarification from the IRS on this exact question last month. Eventually I found https://claimyr.com and used their service which got me connected to an IRS agent in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed what others are saying - if you haven't completed 4 years of undergrad education at the beginning of the tax year, you CAN claim AOTC for both undergrad and grad expenses in that same year, up to the maximum. Saved me so much headache having an official answer I could rely on.

19 I have to admit I was completely wrong about Claimyr! After my skeptical comment, I decided to try it myself since I had other tax questions beyond just the AOTC issue. Got connected to an IRS agent in about 15 minutes after previous attempts where I'd waited over 2 hours and eventually hung up. The agent confirmed everything about the AOTC eligibility and even emailed me the specific reference in Publication 970 that covers this scenario. She explained that it's a commonly misunderstood rule even among tax preparers. Total game-changer for getting official clarification directly from the IRS without wasting half a day on hold!

10 Quick tip from someone who just went through an audit on my AOTC claim: Make sure you have documentation showing you were still in your undergraduate program at the beginning of the tax year. The IRS specifically asked me for enrollment verification from my university showing I was still considered an undergraduate student as of January 1. Also, keep receipts for ALL qualified expenses - not just tuition, but also required textbooks and course materials. My audit was triggered because I claimed some computer equipment that wasn't specifically required by my courses.

3 Has anyone tried claiming AOTC for online classes taken through those alternative education platforms like Coursera or edX? My work paid for some of these courses that were part of a certificate program, but I'm not sure if they count as eligible expenses for AOTC.

Just wanted to add some clarity here since I see some great discussion but also some confusion. The key IRS rule is that AOTC is available for the "first four years of post-secondary education." What matters is whether you've completed four academic years at the START of the tax year, not when you finish your degree. So yes, if you graduate from undergrad in May 2025 but were still in your 4th year (or earlier) when January 1, 2025 began, you can claim AOTC for qualified expenses throughout 2025 - including both your spring undergrad costs AND fall graduate school expenses. One important note that hasn't been mentioned: make sure your graduate program qualifies! The student must be enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential at an eligible institution. Most traditional graduate programs qualify, but it's worth double-checking if you're in an unusual program. Keep excellent records - enrollment verification letters from both institutions showing your status, receipts for all qualified expenses, and Form 1098-T from each school if provided.