Question

In 2019, Elaine paid $2,320 of tuition and $1,300 for books for her dependent son to attend State University this past fall as a freshman. Elaine files a joint return with her husband. What is the maximum American opportunity tax credit that Elaine can claim for the tuition payment and books in each of the following alternative situations?

Answer 1

$2325

Step-by-step explanation:

In 2019 if Elaine AGI income group is less than $160000 then maximum American opportunity credit that she can claim is $2500 on first $4000. i.e 100% on First $2000 and 25% Next $2000 .

but in the given case out of $2320 eligible amount is $2000 and 100% of it comes to $2000 for tution and the next payment is $1300 for books so she can claim credit of 25% on $1300 i.e $325.

So in Total Elaine can claim $2325 credit.

More than $160000 income group of AGI. The American Opportunity Tax Credit is not claimable.