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American Opportunity Tax Credit

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The American Opportunity Tax Credit is a partially refundable tax credit detailed in Section 1004 of the American Recovery and Reinvestment Act of 2009.

The act specifies:

  1. Provisions are specific to tax years 2009 and 2010 for the first 4 years of post-secondary education.
  2. Increases the Hope Scholarship Credit to 100 percent qualified tuition, fees and course materials paid by the taxpayer during the taxable year not to exceed $2,000, plus 25 percent of the next $2000 in qualified tuition, fees and course materials. The total credit does not exceed $2500.
  3. 40% of the credit is refundable.
  4. This tax credit is subject to a phase-out for taxpayers with adjusted gross income in excess of $80,000 ($160,000 for married couples filing jointly).

The act directs several Treasury studies:

  1. Coordination with non-tax student financial assistance;
  2. Coordinate the credit allowed under the Federal Pell Grant program to maximize their effectiveness at promoting college affordability;
  3. Examine ways to expedite the delivery of the tax credit;
  4. With the Secretary of Education, study the feasibility of requiring including community service as a condition of taking their tuition and related expenses into account.

History

Originally proposed by President Barack Obama to help students and families pay for post-secondary education, the proposal called for a $4000 credit in exchange for 100 hours of community service. The stated goal of the credit was to, "cover two-thirds the cost of tuition at the average public college or university and make community college tuition completely free for most students."[1]

H.R.106: The American Opportunity Tax Credit Act of 2009

On January 6, 2009, Congressman Chaka Fattah introduced H.R.106, The American Opportunity Tax Credit Act of 2009. [2]

In brief, the proposed act specified

  1. Any full-time college or university student is eligible.
  2. A $4000 refundable tax credit in exchange for 100 hours of community service.
  3. Community service must be with either a governmental unit, hospital, or 501(c)3 organization.
  4. The Secretary of Education will be responsible for verifying community services requirements.

On January 27, 2009, in the Rayburn House Office Building, Congressman Fattah convened a Congressional Roundtable, "Igniting Public Service and Securing College Access: the American Opportunity Tax Credit, H.R. 106". The panel was keynoted by Former Senator Harris Wofford and included Karen Kaskey (PennSERVE), Michelle Cooper (Institute for Higher Education Policy), David Baime (American Association of Community Colleges), Quyen Arana (K20 Center, University of Oklahoma)[3], and Reginald Williams (Benjamin Banneker Academic High School).[4]

References

  1. ^ "Education". Obama for America. Retrieved 2009-01-13.
  2. ^ "News Release". Chaka Fattah. Retrieved 2009-02-07.
  3. ^ "News Article". Daily Oklahoman. Retrieved 2009-02-07.
  4. ^ "News Release". Chaka Fattah. Retrieved 2009-02-07.