APRIL 10, 2025 | FEATURES | By Grace Bean
As The Bachelor wraps up, it’s time to shift our attention toward a trending series this spring, tax season!
Filing taxes as a college student can be daunting. Here are the plays we’re implementing to dominate this season, also don’t forget to submit your tax returns by April 15!
According to The IRS, The American Opportunity Tax Credit (AOTC) is a way for students to receive up to $2,500 per year to help cover the cost of education during the first four years of college.
The government covers 100% of the first $2,000 you spend on tuition, books, and required supplies. They then cover 25% of the next $2,000 you spend. If this credit reduces your tax bill to zero, you can still receive up to $1,000 as a refund.
That’s hot.
To put it all together, if you spend at least $4,000 on school-related expenses, you receive a full $2,500 credit, even if you don’t owe any taxes, you may still win free money.
Who’s eligible for AOTC? Anyone pursuing a degree and is actively enrolled at least part-time for at least one academic period beginning in the given tax year.
Do You Qualify?
To be eligible, you must be working toward a degree or recognized credential, or be actively enrolled at least part-time for one semester that year.
Sorry seniors! You cannot have completed your fourth year of college at the start of the tax year. You also cannot claim the AOTC (or its older cousin, the Hope Credit) for more than four years.
Also, please do not have a felony or drug conviction by the end of the tax year.
Steps to Claim It
Step 1: Check your Form 1098-T (your school should send this by Jan. 31—it’s basically the tax form version of a grade report, but way more useful).
Step 2: Fill out Form 8863 and attach it to your tax return.
Step 3: Keep proof of everything – receipts, tuition statements, bookstore purchases – because if the IRS decides to fact-check you, they won’t be as forgiving as your professor after a late-night “sorry for the delay” email.
Warning: Don’t Mess This Up
The IRS is not playing games when it comes to tax credits. And no, you cannot claim your taxes in Gold Card Plus. If you claim the AOTC when you don’t qualify, you’ll owe back the money with interest, possibly get hit with fraud penalties and could be banned from claiming it for up to 10 years.
How much can you earn and still qualify?
If your Modified Adjusted Gross Income (MAGI) is under $80,000, you get the full credit. If your MAGI is between $80,000 and$90,000, you get a reduced credit. If you make over $90,000, sorry, but no AOTC for you.
If you’re eligible, take advantage of this. It’s one of the best education tax breaks out there, and it can mean a big boost to your bank account—or at least help soften the blow of next semester’s tuition bill.
Taxes might not be fun, but free money? Always worth it.