American Opportunity Credit: Questions and Answers

Q1. Are there any changes to the tax credits for college expenses?

A. The American opportunity tax credit, which expanded and renamed the already-existing Hope credit, can be claimed for tuition and certain fees you pay for higher education in 2010.

Q2. The Hope credit originally applied only to the first two years of college. Has that changed?

A. Yes. The American opportunity tax credit can be claimed for expenses for the first four years of post-secondary education.

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Six Facts about the American Opportunity Tax Credit

IRS Special Edition Tax Tip 2009-11
Many parents and college students will be able to offset the cost of college over the next two years under the new American Opportunity Tax Credit. This tax credit is part of the American Recovery and Reinvestment Act of 2009.

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Four Tax Tips for 2013

IRS Tax Tip 2013-26, March 5, 2013

If you received unemployment benefits this year, you must report the payments on your federal income tax return.

Here are four tips from the IRS about unemployment benefits.

  1. You must include all unemployment compensation you received in your total income for the year. You should receive a Form 1099-G, Certain Government Payments. It will show the amount you were paid and the amount of any federal income taxes withheld from your payments.
  2. Types of unemployment benefits include:
    • Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund
    • Railroad unemployment compensation benefits
    • Disability payments from a government program paid as a substitute for unemployment compensation
    • Trade readjustment allowances under the Trade Act of 1974
    • Unemployment assistance under the Disaster Relief and Emergency Assistance Act

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Energy Incentives for Individuals in the American Recovery and Reinvestment Act

The American Recovery and Reinvestment Act (ARRA) provides numerous tax incentives for individuals to invest in energy-efficient products.

Residential Energy Property Credit (Section 1121): The new law increases the energy tax credit for homeowners who make energy efficient improvements to their existing homes. The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 for improvements placed in service in 2009 and 2010.

The credit applies to improvements such as adding insulation, energy efficient exterior windows and energy-efficient heating and air conditioning systems.

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Tax Credit Provides Outstanding Opportunity for Home Buyers

A tax credit of up to $8,000 is available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.

Learn how you can take advantage of the tax credit to buy the home of your dreams.

$8,000 Home Buyer Tax Credit at a Glance

The information on this page pertains to the American Recovery and Reinvestment Act of 2009.
The tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.

  • The tax credit does not have to be repaid.
  • The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
  • The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
  • Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

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