Can I claim American Opportunity Tax Credit after graduating in May 2022 and starting grad school?

The question might sound stupid but I'm honestly really confused about my tax credit situation. I graduated with my bachelor's degree in May 2022 (finished within 4 years like I was supposed to). I started my graduate program in August 2022. I know graduate students usually only qualify for the Lifetime Learning Credit, but I was reading online that the American Opportunity Tax Credit applies to the first 4 years of college and you need to be enrolled at least part-time at the beginning of the tax year. Since I was still an undergrad for part of 2022 (January-May), can I claim the $2,500 American Opportunity Tax Credit for my 2022 taxes? Or am I limited to only the Lifetime Learning Credit because I became a grad student in August 2022? This is my first time filing with education expenses so I want to make sure I'm getting the maximum credit I'm entitled to!

0 coins

18 comments

Mae Bennett

•8M

Yes, you can claim the American Opportunity Tax Credit (AOTC) for 2022! The key factor is that you were enrolled in your undergraduate program for at least one academic period beginning in 2022, which you were (January-May 2022). The AOTC can be claimed for the first 4 years of postsecondary education, and since you completed your undergraduate degree within 4 years, you should still qualify. The fact that you started graduate school later in the same year doesn't disqualify you from claiming the AOTC for your undergraduate expenses. Just make sure you're only including qualified education expenses that apply to your undergraduate education when calculating the AOTC. Your graduate expenses would only qualify for the Lifetime Learning Credit, but you can actually claim both credits in the same year as long as you don't use the same expenses for both credits.

0 coins

Mae Bennett

•8M

You're right about not being able to claim both credits for the same student in the same year - I should have been clearer. What I meant was that if you have multiple students (like if you're paying for yourself and a dependent), you could claim different credits for different students. For your situation, since you're just claiming for yourself, you'd need to choose which credit gives you the better benefit. Generally, the AOTC is more valuable (up to $2,500 and 40% potentially refundable) compared to the Lifetime Learning Credit (up to $2,000 and non-refundable). So if you qualify for the AOTC for your undergraduate expenses, that's probably your better option.

0 coins

Melina Haruko

•8M

I had almost this exact situation last year and was super confused too! I found taxr.ai (https://taxr.ai) super helpful with figuring out my education credits. I uploaded my 1098-T forms from both schools and it immediately identified that I could claim the AOTC for the first part of the year when I was finishing my bachelor's. The tool explained that since I was enrolled in my undergrad for the first part of 2022, those expenses qualified for AOTC even though I started grad school later that year. It saved me from missing out on like $1,500 in tax credits!

0 coins

Melina Haruko

•8M

For separating expenses, yes - I had two different 1098-T forms (one from each school), which made it easier. The system helped me allocate which expenses went with which credit. If your forms are already separated by school, that should make it straightforward. The site is definitely legit - it's not just advice, it actually analyzes your tax documents and helps identify credits and deductions you qualify for. I was skeptical at first too, but it caught several things my previous tax software missed. It's developed by tax professionals but explains everything in normal human language.

0 coins

Reina Salazar

•8M

Just wanted to follow up - I tried taxr.ai after asking about it and it was seriously helpful! I had a similar situation with partial year undergrad/grad school and was about to just claim the Lifetime Learning Credit for everything. The tool flagged that I could claim AOTC for my undergrad expenses from spring semester and showed exactly which expenses qualified. It also explained how to handle the split between schools on my tax forms, which none of the "big name" tax software did. Saved me about $1,200 compared to what I would have done on my own. Thanks for recommending it!

0 coins

Saanvi Krishnaswami

•8M

If you've been trying to call the IRS to get clarification on this, good luck! I spent THREE WEEKS trying to reach someone about education credits last year. Finally discovered Claimyr (https://claimyr.com) and they got me connected to an actual IRS agent in under 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that you can claim AOTC for the portion of the year you were an undergrad (as long as it was within your first 4 years). She even walked me through exactly how to fill out Form 8863 correctly when you have both types of education in the same year. Definitely worth it if you need official confirmation.

0 coins

Saanvi Krishnaswami

•8M

It's not a priority line - they use technology that navigates the IRS phone tree and waits on hold for you. When they reach a live agent, they call you and connect you. I was skeptical too, but it literally saved me hours of frustration. No magic involved, just clever automation. It held my place in line while I did other things instead of being stuck listening to hold music for hours. The IRS still has the same wait times, but you don't have to personally sit through them.

0 coins

Mason Lopez

•8M

Had to come back and admit I was wrong about Claimyr. After my frustration boiled over with trying to reach the IRS about a similar education credit question, I tried it out of desperation. Got connected to an agent in about 35 minutes (which is LIGHT YEARS faster than my previous attempts). The agent confirmed that for 2022, I could claim AOTC for my spring semester undergrad expenses even though I started grad school in fall 2022. She also explained I needed to make sure I only included qualified education expenses from my undergrad program when calculating the AOTC. Definitely made a difference in my refund. Sometimes skeptics (like me) need to eat crow!

0 coins

Vera Visnjic

•8M

One thing to be super careful about is making sure the expenses you claim for AOTC are only from your undergrad program. My tax preparer last year made the mistake of including some of my grad school expenses in the AOTC calculation and I ended up getting a letter from the IRS about it. For the AOTC, you can include tuition, required fees, and course materials for your undergrad program. For your grad program, those same expenses would only qualify for the Lifetime Learning Credit. If you got scholarships or grants, those might reduce your eligible expenses too.

0 coins

Vera Visnjic

•8M

You actually CAN claim both credits in the same tax year, but not for the same student. Since you're just claiming for yourself, you need to pick which credit gives you the better benefit. Most people in your situation would benefit more from claiming AOTC for your eligible undergrad expenses, since it's worth up to $2,500 and 40% of it can be refundable. The Lifetime Learning Credit is only worth up to $2,000 and is non-refundable. Look at your qualified expenses for each program and calculate which approach gives you the better result.

0 coins