The AOTC is worth up to $2,500 per eligible student, but is front-loaded — the first $2,000 of expenses is credited dollar for dollar, while only a quarter of the next $2,000 counts.
How it works
100% of the first $2,000 of qualified expenses plus 25% of the next $2,000 gives the credit before phase-out. Above the MAGI phase-out range ($80,000-$90,000 single, $160,000-$180,000 married filing jointly), the credit shrinks proportionally, reaching zero at the top of the range.
What this does not include
The AOTC is limited to the first four years of post-secondary education per student and requires at least half-time enrollment in a degree program — this calculator computes the dollar amount assuming those eligibility rules are already met.
How to use this calculator
- Enter qualified education expenses paid and your MAGI.
- Select your filing status.
Frequently asked questions
Why isn’t the credit just 25% of all expenses?
Because the rate isn’t flat — the first $2,000 is credited at 100%, and only the next $2,000 at 25%, so spending beyond $4,000 doesn’t increase the credit further.
Is any part of the AOTC refundable?
Up to 40% of the credit can be refundable even if it exceeds tax owed, unlike many nonrefundable credits — though this calculator computes the credit amount, not the refundable/nonrefundable split.
Can I claim both the AOTC and the Lifetime Learning Credit for the same student?
No — only one education credit can be claimed per student per year, so the higher-value option (usually the AOTC, if eligible) should be chosen.
