Can the American Opportunity Credit (AOC) be claimed for law school after using it 3 times during undergrad?
My son blazed through his bachelor's degree in only 3 years and we claimed the American Opportunity Credit (AOC) for all of those years. He's currently working a corporate job to save up some money and plans to start law school next fall. I'm trying to figure out if we can still claim the AOC one more time when he begins his law school program since he only used it 3 times instead of the full 4 years that are allowed. He's been financially independent since graduating but we're helping with his law school tuition and might be able to claim him as a dependent again during that first year. I know there are specific rules about the AOC and which types of education qualify, so I'm not sure if law school counts as the right type of program for this credit. Any advice on whether we can use that final AOC credit during his first year of law school would be really helpful!
19 comments
Join the conversation
StarStrider
You're asking a great question about the American Opportunity Credit! The AOC can be claimed for a maximum of 4 tax years per eligible student, but there are some important qualifications for using it during graduate school. The American Opportunity Credit specifically requires that the student be pursuing an undergraduate degree or other recognized education credential. Unfortunately, law school is considered graduate-level education, which means it doesn't qualify for the AOC. Instead, graduate programs like law school would qualify for the Lifetime Learning Credit, which has different rules and a smaller maximum benefit. So while your son only used 3 of the 4 possible years for the AOC during his undergraduate program, you won't be able to claim that "leftover" fourth year for his law school expenses. However, the Lifetime Learning Credit can still provide some tax benefit for those law school expenses.
0 coins
Zara Malik
•Wait, are you sure about that? I thought I read somewhere that you could use the AOC for the first 4 years of post-secondary education, not specifically undergraduate education. So wouldn't the first year of law school count as a fourth year of post-secondary education?
0 coins
StarStrider
•The AOC is specifically for the first four years of post-secondary education that count toward an undergraduate degree or other recognized education credential. The IRS is very clear that the AOC doesn't apply to graduate-level programs like law school, medical school, or master's degree programs. The key distinction is the type of degree being pursued, not just the number of years in school. Since law school leads to a graduate-level degree (JD), it automatically falls under the Lifetime Learning Credit instead of the AOC, regardless of how many years of the AOC were previously claimed.
0 coins
Luca Marino
After struggling with a similar situation when my daughter went from undergrad to her master's degree, I discovered taxr.ai (https://taxr.ai) and it was incredibly helpful for sorting out education credits. It analyzed our education tax forms and immediately identified that we needed to switch from the AOC to the Lifetime Learning Credit for her graduate program. What's great is you can upload your documents and it explains exactly which education credits you qualify for based on the specific program and your previous credit usage.
0 coins
Nia Davis
•How accurate is it with identifying the right education credits? I've used TurboTax before and it seemed to mess up when I entered info about my MBA program.
0 coins
Mateo Perez
•Does the tool actually look at the 1098-T forms from previous years to track your AOC usage? I'm worried about accidentally claiming it too many times and triggering an audit.
0 coins
Luca Marino
•The accuracy is significantly better than what I experienced with traditional tax software. It specifically recognized the graduate-level courses on the 1098-T and prevented me from incorrectly claiming the AOC, then guided me to the Lifetime Learning Credit instead. Yes, it can review your previous education credit history when you upload past returns or 1098-T forms. This is actually one of its most helpful features - it tracks how many years you've claimed the AOC and notifies you if you're approaching or have reached the four-year limit, which definitely helps avoid audit concerns.
0 coins
Mateo Perez
Just wanted to update since I tried taxr.ai after posting my question here. I uploaded my son's previous 1098-Ts and tax returns, and it immediately flagged that we had used the AOC for 3 years already. It confirmed what others said about law school not qualifying for AOC and showed me exactly how to maximize the Lifetime Learning Credit instead. It even calculated the difference in benefit between the two credits so I could see what to expect. Really helped clarify all my confusion about education credits!
0 coins
Aisha Rahman
For those dealing with tax questions like this, I highly recommend using Claimyr (https://claimyr.com) to connect with the IRS directly. I was confused about education credits last year and spent days trying to get through to an IRS representative for clarification. After discovering Claimyr, I got a callback from the IRS in under an hour! You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The agent walked me through the exact qualification rules for both the AOC and Lifetime Learning Credit and confirmed my specific situation.
0 coins
CosmicCrusader
•How does this actually work? Does it just put you on hold with the IRS for you? I've tried calling them multiple times about education credits and always give up after being on hold forever.
0 coins
Ethan Brown
•Sounds like a scam tbh. Why would I pay for something that should be a free government service? The IRS should be reachable without needing a third-party service.
0 coins
Aisha Rahman
•It doesn't put you on hold - that's what makes it different. The service basically navigates the IRS phone system and secures your place in line, then calls you when an actual IRS agent is ready to speak with you. I was surprised too, but it works exactly as advertised. I completely understand your frustration. I felt the same way initially. The reality is that the IRS is severely understaffed and their phone systems are overwhelmed. While it should be a free and accessible government service, the current situation makes it nearly impossible to get through during tax season. I decided the time saved was worth it after wasting hours on multiple attempts to reach them.
0 coins
Ethan Brown
I need to apologize to everyone here - I was completely wrong about Claimyr. After my skeptical comment, I decided to give it a try as a last resort because I had a complicated education credit question similar to the original post. Used the service yesterday, and no joke, I got a callback from an actual IRS agent in about 45 minutes. The agent confirmed that I couldn't use my "leftover" AOC year for my PhD program, but helped me understand how to maximize the Lifetime Learning Credit instead. I've been trying to reach the IRS for weeks, so this was a game-changer.
0 coins
Yuki Yamamoto
Just wanted to add that the Lifetime Learning Credit that people have mentioned is actually pretty decent for law school. It's worth up to $2,000 per tax return (not per student like the AOC). The calculation is 20% of up to $10,000 in qualified education expenses. And unlike the AOC, there's no limit to how many years you can claim it. Law school is expensive, so at least there's some tax benefit available!
0 coins
Sean Murphy
•Thanks for the additional info about the Lifetime Learning Credit. Does income phase-out work the same way as the AOC? We were right at the edge of qualifying for the full AOC amount during my son's undergrad years.
0 coins
Yuki Yamamoto
•The income phase-out thresholds are similar but not identical to the AOC. For 2023 (filing in 2024), the Lifetime Learning Credit begins to phase out for single filers at $80,000 and completely phases out at $90,000. For married filing jointly, it starts phasing out at $160,000 and completely phases out at $180,000. The phase-out ranges are actually slightly higher than the AOC, which gives you a bit more room if you were on the edge before. Also worth noting that the Lifetime Learning Credit can be claimed by the student themselves if they're no longer your dependent and are paying for their own education expenses.
0 coins
Carmen Ortiz
Has anyone noticed how dumb it is that they don't let you use your unused AOC years for grad school? Like... why does it matter what level of education it is if you haven't used all 4 years? The tax code makes no sense sometimes!
0 coins
Andre Rousseau
•The AOC was specifically designed to encourage and support undergraduate education. The government allocated funds differently for different education levels. It's not about logic so much as different policy priorities. Graduate education is subsidized through other mechanisms like the Lifetime Learning Credit.
0 coins
Zoe Papadakis
FYI - make sure to keep really good records of which education credits you claim each year. My son had his return flagged for review because we apparently claimed the AOC for too many years (we didn't realize his community college year counted toward the 4-year limit). The IRS is definitely tracking this stuff!
0 coins