2028 American Opportunity Credit
2028 AOTC: 100% of first $2,000 + 25% of next $2,000 = up to $2,500/student. 40% refundable ($1,000). Phase-out MAGI $80k-$90k single / $160k-$180k MFJ.
| Pre-phase-out total | — |
| Phase-out factor | — |
| AOTC credit | — |
| Refundable (40%) | — |
| Non-refundable (60%) | — |
The 2028 American Opportunity Tax Credit covers the first 4 years of post-secondary education. Up to $2,500 per student: 100% of first $2,000 + 25% of next $2,000 in qualified tuition + fees + required course materials. 40% refundable ($1,000 per student even with no tax owed).
4-Year Limit
AOTC available for first 4 years of post-secondary, must be at least half-time, pursuing a degree/credential. After 4 years (or completing degree), switch to Lifetime Learning Credit. No felony drug conviction. Form 8863.
AOTC vs LLC
AOTC: $2,500 max, 40% refundable, first 4 years only, half-time+, degree-seeking. LLC: $2,000 max, non-refundable, unlimited years, any course count, no degree required. AOTC almost always wins for traditional undergrad — bigger credit + refundable.
Qualified Expenses
Tuition, fees required for enrollment, books and supplies (even if not bought from school). Excluded: room/board, transportation, insurance, personal expenses, off-campus housing. 529 distributions reduce qualifying expenses dollar-for-dollar — coordinate carefully.
Phase-Out by MAGI
2028 phase-out (projected): single $80k-$90k, MFJ $160k-$180k. No partial credit above upper threshold. Spread expenses across years for two children to keep MAGI strategic.
Last updated May 2026. Sources: IRS AOTC.