Finished undergrad in 3 years - can I claim American Opportunity Credit for 1st year of grad school?

Thanks for that helpful explanation! Just to clarify - does the IRS explicitly state somewhere that graduate education doesn't qualify for AOTC? Or is it more about whether I've used up my 4 years of eligibility regardless of what level the education is?

The IRS doesn't explicitly prohibit graduate education, but they do specify that the credit is for the "first 4 years of post-secondary education." The key factor is whether you've completed your first 4 years of post-secondary education before the tax year in question. Since you've only completed 3 years, you technically have 1 year of eligibility remaining. However, some tax professionals interpret this to mean undergraduate education only, while others focus on the "4 years" limit regardless of program level. To be certain, you might want to check IRS Publication 970 or consult with a tax professional who can review your specific situation.

Does it actually check your specific situation or just give general advice? I'm wondering because my son is in a similar position but he had a semester of college during high school dual enrollment and I'm not sure if that counts toward his 4 years.

I'm skeptical about these kinds of tools. How does it have access to official IRS interpretations? Wouldn't it be safer to just call the IRS directly and get a definitive answer instead of trusting some website?

It does check your specific situation - you upload your academic transcripts and previous tax returns, and it analyzes those documents to determine your exact eligibility. For dual enrollment situations, it can identify which courses were taken before high school graduation (those typically don't count against AOTC eligibility) versus college courses taken after high school. Regarding official interpretations, the tool references IRS Publication 970 and other official guidance. It's not making things up - it's applying the established rules to your specific documentation. You can certainly call the IRS, but good luck getting through during tax season, and the tool provides documentation you can refer to if your return is ever questioned.

Wait, how does this service work? I thought it was impossible to get through to the IRS without waiting for hours. Is this some kind of priority line or something?

This sounds like a scam. Why would anyone pay a third party when you can just call the IRS directly? And even if you do get through, the IRS phone reps give incorrect information all the time. I've had them tell me completely wrong things before.

It's not a priority line - it uses technology to navigate the IRS phone tree and wait on hold for you. When an agent picks up, you get a call back and are connected to them. Super convenient if you've tried calling the IRS during tax season and experienced those ridiculous wait times. The key difference between calling yourself versus using this service is that you don't have to waste hours on hold. And while some IRS reps might give incorrect information, I specifically asked for someone who could help with education credits, and the person I spoke with was knowledgeable about AOTC requirements. You still get the same IRS agents, just without the hold time.

Yes, I was full-time for all 3 years of undergrad. I actually took extra courses each semester to graduate early. And I did claim AOTC for all 3 years of my undergrad. My parents claimed it for my first 2 years when I was their dependent, and I claimed it myself last year for my final year when I filed as independent. That's why I'm wondering if I can use that "4th year" eligibility now.

Since you were full-time for all 3 years and AOTC was claimed for those years, you should have 1 year of eligibility remaining. The fact that your parents claimed it for 2 years and you claimed it for 1 year doesn't matter - it's based on the student's academic years, not who claimed the credit. The key requirement is that you haven't completed 4 years of post-secondary education before the beginning of the tax year. Since you've only completed 3, you should be eligible to claim it for your first year of grad school. Just make sure your grad program is at an eligible educational institution and that you're enrolled at least half-time in a degree program.

I claimed AOTC for my first semester of grad school after finishing undergrad in 3.5 years, and my return was not audited. I made sure to keep copies of my transcripts and documentation showing I had only completed 3.5 academic years before starting grad school. The key is having documentation ready if they ever question it.