American opportunity tax credit
Encyclopedia
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:
The act directs several Treasury
studies:
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."
introduced H.R.106, The American Opportunity Tax Credit Act of 2009.
In brief, the proposed act specified
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
), and Reginald Williams (Benjamin Banneker Academic High School
).
on December 16, 2010 and signed into law by President
Barack Obama
on December 17, 2010.
Among other things, the bill extends the American opportunity tax credit for tax years 2011 and 2012.
Tax credit
A tax credit is a sum deducted from the total amount a taxpayer owes to the state. A tax credit may be granted for various types of taxes, such as an income tax, property tax, or VAT. It may be granted in recognition of taxes already paid, as a subsidy, or to encourage investment or other behaviors...
detailed in Section 1004 of the American Recovery and Reinvestment Act of 2009
American Recovery and Reinvestment Act of 2009
The American Recovery and Reinvestment Act of 2009, abbreviated ARRA and commonly referred to as the Stimulus or The Recovery Act, is an economic stimulus package enacted by the 111th United States Congress in February 2009 and signed into law on February 17, 2009, by President Barack Obama.To...
.
The act specifies:
- Provisions are specific to tax years 2009 and 2010 (later extended to 2011 and 2012) for the first 4 years of post-secondary education.
- Increases the Hope Scholarship CreditHope Scholarship CreditThe Hope credit, provided by , is available to taxpayers who have incurred expenses related to the first two years of postsecondary education. For this credit to be claimed by a taxpayer, the student must attend school on at least a part-time basis...
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. - 40% of the credit is refundable.
- 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
United States Department of the Treasury
The Department of the Treasury is an executive department and the treasury of the United States federal government. It was established by an Act of Congress in 1789 to manage government revenue...
studies:
- Coordination with non-tax student financial assistance;
- Coordinate the credit allowed under the Federal Pell Grant program to maximize their effectiveness at promoting college affordability;
- Examine ways to expedite the delivery of the tax credit;
- 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 ObamaBarack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
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
Community service
Community service is donated service or activity that is performed by someone or a group of people for the benefit of the public or its institutions....
. 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."
H.R.106: The American Opportunity Tax Credit Act of 2009
On January 6, 2009, Congressman Chaka FattahChaka Fattah
Chaka Fattah is the U.S. representative for , serving since 1995. He is a member of the Democratic Party...
introduced H.R.106, The American Opportunity Tax Credit Act of 2009.
In brief, the proposed act specified
- Any full-time college or university student is eligible.
- A $4000 refundable tax credit in exchange for 100 hours of community service.
- Community service must be with either a governmental unit, hospital, or 501(c)3 organization.
- 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
Harris Wofford
Harris Llewellyn Wofford served as a Democratic U.S. Senator from Pennsylvania from 1991 to 1995 and as the fifth president of Bryn Mawr College, and is a noted advocate of national service and volunteering...
and included Karen Kaskey (PennSERVE), Michelle Cooper (Institute for Higher Education Policy), David Baime (American Association of Community Colleges
American Association of Community Colleges
The American Association of Community Colleges , headquartered in the National Center for Higher Education in Washington, D.C., is the primary advocacy organization for community colleges at the national level and works closely with directors of state offices to inform and affect state policy...
), Quyen Arana (K20 Center
K20 Center
The is a statewide research and development center located on the research campus of the University of Oklahoma....
, University of Oklahoma
University of Oklahoma
The University of Oklahoma is a coeducational public research university located in Norman, Oklahoma. Founded in 1890, it existed in Oklahoma Territory near Indian Territory for 17 years before the two became the state of Oklahoma. the university had 29,931 students enrolled, most located at its...
), and Reginald Williams (Benjamin Banneker Academic High School
Benjamin Banneker Academic High School
Benjamin Banneker Academic High School is a small magnet high school located in Washington, D.C., that was originally built to serve as a neighborhood Junior High School and named in honor of the African-American mathematician, astronomer, clockmaker, and almanac author, Benjamin Banneker. In 1980...
).
H.R. 3296: Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 , was passed by the United States CongressUnited States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
on December 16, 2010 and signed into law by President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
on December 17, 2010.
Among other things, the bill extends the American opportunity tax credit for tax years 2011 and 2012.