enrolled vs. matriculated for AO college tax credit

Pub. 270 American Opportunity Credit states:

"For at least one academic period beginning in 2013, the student was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential."

My son (age 17, post-high school, has a GED) is taking automotive technology courses at a local community college. He is enrolled but not matriculated. The courses he is taking will apply towards his Associate's degree in automotive technology, if/when he chooses to matriculate. Full-time status at this college is 12 credits (4 courses); he is taking 9 credits (3 courses) so is certainly more than half-time for the AO credit.

Is he an eligible student for the AO credit? Thanks.

Reply to
rachelms79
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No, he is not an eligible student for the AOTC because he is not enrolled in a degree or certificate program per Section 1091 of Title 20 of the US Code. Mere enrollment in the school is not enough. Should he later enroll in a degree or certificate program and get credit for prior course work then he would become an eligible student for that tax year. E.g., he takes 9 credits in the spring semester as a part-time student. In the fall he enrolls in a degree program and obtains credit for the spring classes he took. For that tax year, he would be considered an eligible student for both semesters.

Reply to
Alan

Thanks. I paid the spring semester 2014 tuition in Dec. 2013.

  1. If he matriculates during this spring semester 2014 (e.g. in a couple weeks from now), after this semester already started, would he be eligible for AOTC? Or does the matriculation need to precede the tuition payment?

  1. If he matriculates during fall semester 2014, could I take the 2013 payment as a 2014 tax deduction (i.e. and not include this 2013 payment as a tax credit or deduction at all for 2013 tax return)? Or is it too late now to get a tax credit for that Dec. 2013 payment?

Reply to
rachelms79

If he becomes an eligible student for the spring semester (the school carries him on its books as a degree or certificate candidate or as you say he is matriculated) then the payment you made in Dec. 2013 for the first 2014 academic period is qualified expense for an eligible student. That payment now qualifies for a 2013 AOTC credit assuming he meets the other requirements for eligibility.

The 2013 payment can only be used for the AOTC in 2013 if he becomes an eligible student for the year 2014.

Keep in mind, that the AOTC is only available for four tax years. I have seen some clients who have taken the Lifetime Learning Credit for the first year when their child only had a small amount of expense and it was expected that the next few years would generate a significantly larger tax benefit.

Reply to
Alan

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