As people prepare to complete their federal tax returns for the 2010 year (the filing deadline is April 18 this year), they should note that for parents with children attending college, an important tax credit is available to them.
The American Opportunity Tax Credit (AOTC) was originally made available to taxpayers through the 2009 economic stimulus legislation. Thanks to the efforts of Senator Charles Schumer, Congress at the end of 2010, renewed the American Opportunity Tax Credit (AOTC) for the 2011 and 2012 tax years.
The AOTC provides middle class families with children in college with $1 off their federal taxes for every $1 spent on tuition, up to $2,500 per year. For families with children in college who do not have enough income tax liability to qualify for the full credit, the law provides a refund worth up to 40 percent of the credit for each student.
President Obama’s proposed 2012 federal budget would make this tax credit a permanent part of the tax code.
Senator Schumer has noted data from the United States Treasury Department indicating that less than one-half of New York State taxpayers who are eligible for the AOTC took advantage of the tax credit in 2009. It is possible to file an amended 2009 tax return to claim the credit and receive a refund for the 2009 tax year.
Submitted by: Ken Kruly, director, government relations
