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The new credit is currently available through 2017. The American Opportunity credit equals 100% of the first $2,000 of a studentâs qualified education expenses plus 25% of the next $2,000. The maximum annual credit is $2,500.
But only one Lifetime Learning Credit can be claimed per return. The American Opportunity Tax Credit, however, imposes a requirement that the student for whom the credit is claimed has no felony drug convictions. The Lifetime Learning Credit has no such requirement. We will assume for now that the taxpayer has decided to go ahead and calculate the amount he or she can claim for an American Opportunity Tax Credit. The next question to ask is whether a taxpayerâs adjusted gross income (AGI) falls beneath the phase-out limit.