Trying to figure out if I'm eligible for the American Opportunity Tax Credit (AOTC) for college expenses

You're asking great questions about the American Opportunity Tax Credit! I can help clear this up for you. Based on what you've shared, you likely do qualify for the AOTC. The basic requirements are: you must be pursuing a degree, enrolled at least half-time (which you are with 12 credits), in the first four years of higher education, and have eligible education expenses. Your income of $13,500 is well below the phase-out threshold, which starts at $80,000 for single filers. For your education expenses, both the tuition ($9,800) and required course materials ($1,200) count toward the credit. However, there's an important distinction with scholarships and loans. Scholarships that are tax-free don't count as expenses you paid - you'll need to subtract those from your qualified expenses. Student loans DO count as expenses "paid by you" since you'll be repaying that money eventually. The maximum credit is $2,500, calculated as 100% of the first $2,000 in qualified expenses, plus 25% of the next $2,000. With your expenses, you should qualify for the full amount.

I was in a similar situation last year and found taxr.ai super helpful for figuring out my education credits. I was confused about which expenses qualified and how my scholarships affected everything. I uploaded my 1098-T and financial aid documents to https://taxr.ai and it analyzed everything to tell me exactly what I could claim for the AOTC. It even explained how my student loans were treated differently than my scholarships for tax purposes. Helped me get the full credit I was entitled to without second-guessing myself.

I was really hesitant about using yet another tax tool, but after struggling with figuring out my AOTC eligibility with all my complicated financial aid, I decided to try taxr.ai. Honestly, it was a game-changer. I had a mix of scholarships, grants, and some tuition my parents paid, and was totally confused about what I could claim. The tool analyzed my 1098-T and financial aid statements and showed me exactly how much of my expenses qualified for the credit. It found that I could claim expenses my regular tax software missed because of how it handled my partial scholarship. Ended up getting about $1,800 in credit that I almost missed out on! The explanation it gave about how loans count as expenses I paid, but scholarships don't, finally made everything click for me.

If you're having trouble getting clear answers about your AOTC eligibility, you might want to call the IRS directly. I tried that route initially and gave up after being on hold for over 2 hours. Then I discovered https://claimyr.com which got me through to an actual IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent I spoke with was really helpful in explaining exactly how my education expenses qualified for the credit, especially with my mix of scholarships and student loans. They walked me through how to document everything properly to avoid issues. Definitely worth getting that official confirmation before filing.

I have to eat my words here. After my skeptical comment, I was still struggling to figure out my AOTC situation with a partial year scholarship and decided to try Claimyr out of desperation. I honestly expected it to be a waste of time, but to my surprise, it actually worked exactly as advertised. I got connected to an IRS agent in about 20 minutes (which is miraculous considering I'd previously waited 3+ hours and given up). The agent clarified that in my situation, I needed to reduce my qualified expenses by the tax-free portion of my scholarship, but could still claim expenses paid with student loans. She also explained how to document everything correctly on Form 8863. Having that official clarification directly from the IRS gave me the confidence to claim the full credit I was entitled to. Would've probably claimed less without that conversation just to be safe.

Don't forget to keep really good records for your AOTC claim! My brother got audited last year because he claimed the full credit but didn't have receipts for his textbooks. Save ALL receipts for required books, supplies, and equipment. The IRS is pretty strict about documentation for education credits.

Quick heads up - another requirement for the AOTC that people sometimes miss is that you can't have a felony drug conviction. Also, if someone else claims you as a dependent (like your parents), then THEY would get the credit, not you. Make sure you coordinate with your parents so you don't both try to claim it!