Question

In 2019, Elaine paid $2,800 of tuition and $600 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? (Leave no answer blank. Enter zero if applicable.)

a. Elaine’s AGI is $80,000. b. Elaine’s AGI is $168,000. c. Elaine’s AGI is $184,000.

Answer 1

Part A

Maximum American opportunity tax credit

$2350

Description	Amount	Explanation
(1) AOC before phase-out	2350	[($2,000 × 100%) + ($1400 × 25%)]
(2) AGI	$80000
(3) Phase-out threshold	160000
(4) Excess AGI	0	(2) – (3) {but not <0 and limited to a maximum of $20,000}
(5) Phase-out range for single taxpayer	20000	$180,000 – 160,000
(6) Phase-out percentage	0%	(4) / (5)
(7) Phase-out amount	0	(1) × (6)
(8) Total AOC after phase-out	$2350	(1) – (7)

Part B

Maximum American opportunity tax credit

$1410

Description	Amount	Explanation
(1) AOC before phase-out	2350	[($2,000 × 100%) + ($1400 × 25%)]
(2) AGI	$168000
(3) Phase-out threshold	160000
(4) Excess AGI	8000	(2) – (3) {but not <0 and limited to a maximum of $20,000}
(5) Phase-out range for single taxpayer	20000	$180,000 – 160,000
(6) Phase-out percentage	40%	(4) / (5)
(7) Phase-out amount	940	(1) × (6)
(8) Total AOC after phase-out	$1410	(1) – (7)

Part C

Maximum American opportunity tax credit

$0

Description	Amount	Explanation
(1) AOC before phase-out	2350	[($2,000 × 100%) + ($1400 × 25%)]
(2) AGI	$184000
(3) Phase-out threshold	160000
(4) Excess AGI	20000	(2) – (3) {but not <0 and limited to a maximum of $20,000}
(5) Phase-out range for single taxpayer	20000	$180,000 – 160,000
(6) Phase-out percentage	100%	(4) / (5)
(7) Phase-out amount	2350	(1) × (6)
(8) Total AOC after phase-out	$0	(1) – (7)