Can I claim American Opportunity Credit for first year of grad school after finishing undergrad in 3 years?

But wait, the IRS website doesn't specifically say "undergraduate" anywhere that I can find. It just says "first 4 years of post-secondary education" - so couldn't that technically include the first year of grad school if you only used 3 years for undergrad? The wording seems ambiguous.

The IRS is quite specific about this in their publications, even if the summary wording seems ambiguous. The AOTC is intended for what they call "the first 4 years of post-secondary education," but this is specifically defined as undergraduate education. Once you receive your bachelor's degree, you're considered to have completed your undergraduate education regardless of how long it took. The Lifetime Learning Credit is specifically designed for graduate education and continuing education, which is why I recommend looking into that instead. It's a great alternative that was created exactly for situations like yours.

How exactly does it work? Do you just upload all your docs and it figures everything out? My situation is a bit complicated because I took some undergrad classes during my first semester of grad school to fulfill prerequisites. Would it be able to handle that?

I'm a bit skeptical tbh. Couldn't you just read IRS pub 970 for free? Why use some AI thing that might get it wrong? Tax law is complicated and I wouldn't trust a computer to interpret it correctly.

The process is super straightforward - you just upload your relevant documents and it analyzes everything to determine exactly which education credits you qualify for. It actually would be perfect for your situation with mixed undergrad/grad classes because it examines course-level details when needed to maximize your eligible credits. I actually tried reading through Publication 970 first and found it really confusing with all the exceptions and special cases. What I liked about taxr.ai was that it explained everything in simple language while still referencing the exact tax code sections. It's not just making things up - it's applying the actual IRS rules but in a way that's much easier to understand than wading through tax publications.

How does this even work? I thought it was impossible to get through to the IRS especially during tax season. Is this just paying someone to wait on hold for you?

This sounds like complete BS. Nobody can magically get through to the IRS faster than anyone else. The phone systems don't work that way. You probably just got lucky with timing or something.

It works by using a system that navigates the IRS phone tree and waits on hold for you, then calls you when an actual agent is on the line. You don't have to sit there listening to the hold music for hours - you just go about your day until they connect you. I was skeptical too before I tried it. The IRS phone system is notoriously difficult, but what Claimyr does is monitor thousands of calls to understand the best times to call and which phone trees have shorter wait times. It's not magic - it's just smart technology combined with data about call patterns. I was initially planning to just give up on getting an answer, but being able to actually speak with an IRS representative made all the difference in correctly filing my return.

Do you have the exact section in Pub 970 that says this? I'm looking at it now and can't find where it specifically says undergraduate only.

It's in the section about AOTC eligibility requirements. The publication states that the credit is available "for the first 4 years of postsecondary education" and then further clarifies that a student who has completed "the first 4 years of postsecondary education before the beginning of the tax year" isn't eligible. The key is in how they define "completed the first 4 years" - there's a part that explains that a student who has already completed an undergraduate degree program is considered to have completed their first 4 years of postsecondary education, regardless of how long it actually took. So by graduating with your bachelor's degree, you've "used up" your AOTC eligibility even though it only took 3 years.

Don't do it. The IRS systems are pretty good at catching this now. They get information from your school about what degree program you're in, and universities report whether you're an undergraduate or graduate student on the 1098-T form. It's not worth risking an audit and penalties over this.