Jermaine and Kesha are married, file a joint tax return, have AGI of $82,500, and have two children. Devona is beginning her freshman year at State University during Fall 2017, and Arethia is beginning her senior year at Northeast University during Fall 2017 after having completed her junior year during the spring of that year. Both Devona and Arethia are claimed as dependents on their parents' tax return.
Devona's qualifying tuition expenses and fees total $4,000 for the fall semester, while Arethia's qualifying tuition expenses and fees total $6,200 for each semester during 2017. Full payment is made for the tuition and related expenses for both children during each semester. The American Opportunity credit available to Jermaine and Kesha for 2017 is:

Question

Jermaine and Kesha are married, file a joint tax return, have AGI of $82,500, and have two children. Devona is beginning her freshman year at State University during Fall 2017, and Arethia is beginning her senior year at Northeast University during Fall 2017 after having completed her junior year during the spring of that year. Both Devona and Arethia are claimed as dependents on their parents' tax return. ​
Devona's qualifying tuition expenses and fees total $4,000 for the fall semester, while Arethia's qualifying tuition expenses and fees total $6,200 for each semester during 2017. Full payment is made for the tuition and related expenses for both children during each semester. The American Opportunity credit available to Jermaine and Kesha for 2017 is:

Quizplus · Accepted Answer

The American Opportunity Credit (AOC) is available for each eligible student for up to four years of post-secondary education. The credit is equal to 100% of the first $2,000 of qualifying tuition and related expenses and 25% of the next $2,000 of such expenses, with a maximum credit of $2,500 per eligible student per year.

In this case, both Devona and Arethia are eligible students, and their qualifying tuition and related expenses for the year exceed $4,000 ($4,000 for Devona and $6,200 x 2 = $12,400 for Arethia).

Since Jermaine and Kesha can claim the AOC for both students, they can claim a credit of $2,500 for Devona and a credit of $2,500 for Arethia, for a total credit of $5,000.

Therefore, the answer is C) $5,000.

Jermaine and Kesha Are Married, File a Joint Tax Return