Matt is a single father.He paid $5,000 in qualifying expenses for his son,Kyle,to attend the University of Oregon.Kyle is a sophomore.Matt's AGI is $47,000.What is his allowable American opportunity tax credit after the credit phaseout based on AGI is taken into account?

Question

Quizplus · Accepted Answer

The American opportunity tax credit allows for a maximum credit of $2,500 per eligible student per year. Matt's qualifying expenses for Kyle's education meet the criteria for the credit, so he could claim the full $2,500 credit. However, the credit begins to phase out for taxpayers with AGIs over $80,000 ($160,000 for married filing jointly), and is completely phased out for AGIs over $90,000 ($180,000 for married filing jointly). Matt's AGI of $47,000 is well below these phaseout limits, so he can claim the full $2,500 credit. Therefore, the answer is B, $2,500.

Matt Is a Single Father