$2,500 Annual Tuition Tax Credit Preserved in Fiscal Cliff Deal

Barry Lenson

Tax Credit Preserved in Fiscal Cliff Deal  As you know, Congress and the White House reached an agreement a few days ago that prevented our economy from falling off the so-called “fiscal cliff.” But you might not have noticed that at the same time, American college students and their families dodged a financial bullet too.

As part of the agreement, The American Opportunity Tax Credit, which has been around since 2010, was preserved. If you are a college student, chances are that you have already been taking advantage of it. It allows families to get an annual tax credit of up to $2,500 to help pay for educational expenses. Students and their families can take advantage of the credit for up to four years. So the net is, students and their families can get as much as a $10,000 tax credit to help pay for college.

To quote from the description of the program that’s posted on the Internal Revenue Service’s website . . .

“It is a tax credit of up to $2,500 of the cost of tuition, fees and course materials paid during the taxable year. Also, 40% of the credit (up to $1,000) is refundable. This means you can get it even if you owe no tax.”

And Still More Good News for Students . . .

Pell Grants have been preserved too. They offer grants for students from families that make less than $30,000.

So there’s no doubt about the fact that the U.S. Government has just given more lip service to the concept of helping students pay for college. Could the Government do even more? Of course it could. But because students have just won a victory, let’s not point fingers or complain.

Let’s feel good. Something good just happened.

Related Posts

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Student Loan Programs under Fire in Washington Budget Talks
What’s a Pell Grant? How Can You Get One?

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