American Opportunity Tax Credit question

[strawberrygreen]

I was wondering if anyone could give us some help regarding the American Opportunity Tax Credit (AOTC) and how it would apply to TESC or the other Big Three. The credit doesn't apply to CLEPs and DSST costs, but we've been using it to pay for some classes my daughter is taking at a local school while she's racking up CLEPs for her CBE degree, planning to finish at TESC eventually.

I'm trying to figure out how to make the credit apply while my daughter is enrolled at TESC and wonder if anyone else has explored those waters yet.

Here are a couple key rules of the AOTC:

(1) The student must be enrolled in a recognized program leading to a degree or certificate.

(2) For at least one academic period of the year the student must carry "at least ½ of the normal full-time work load for the degree the student is pursuing." (At TESC, I believe 6 credit hours would qualify as "more than 1/2 time" for one term.)

(3) If the student meets the qualification rules for the AOTC for one term of the year, then it pays for coursework for the rest of the year, too ... even while a credit-only student somewhere... and even grad level classes! They just have to be enrolled 1/2 time in an undergrad program for one term of the year.

American Opportunity Tax Credit: Questions and Answers

So here is my question: if a student is registered in a degree program at TESC and signs up to do 2 TECEPS during one term at TESC, would that qualify them for the AOTC? This is assuming no actual online classes are being taken at TESC during the given term.

What if instead of the TECEPS the student does 1 portfolio at TESC for which they expect to earn 9-12 credit hours?

The person I spoke with at TESC said she's never been asked this question before, so she wasn't sure. She started talking with me about federal financial aid requiring courses to be graded (TECEPS are not graded), but the AOTC is not a federal financial aid program, and the tax code for AOTC doesn't have any rules about the courses being graded courses, near as I can tell.

I know the "proper" answer is to ask my tax professional, but unfortunately I am my tax professional...

Just hoping someone out there might have looked into this themselves and have some helpful insights.

[bricabrac]

For the years my accountant applied the credit I received a 1098T tax form the school.

[strawberrygreen]

Did you get the 1098T form for any terms when you were just doing TECEPs or portfolio, and no courses through TESC? We're trying to do some careful course planning so we make sure we have what we need left over for 2017 for my daughter - that will be the fourth (and last) year she would qualify for the American Opportunity Tax Credit.

[bricabrac]

Did you get the 1098T form for any terms when you were just doing TECEPs or portfolio, and no courses through TESC? We're trying to do some careful course planning so we make sure we have what we need left over for 2017 for my daughter - that will be the fourth (and last) year she would qualify for the American Opportunity Tax Credit.

That is actually a question for the Bursar. Under the PPC plan I would assume any costs would count as tuition. Maybe a student who used the plan last year will chime in?

I used the comprehensive and enrolled options tuition plans. I had one term that was a TECEP only but have no clue if it was included in the total reported.

[strawberrygreen]

Follow-up in case anyone else is interested in the topic later...

From what I can tell, TESU will call you 1/2 time enrolled if you take 4 or more credits in one term, even if those are TECEP credits.

As far as the AOTC applying, it does seem to. Doesn't count for CLEP exams but it would count for TECEPs since they are through a federally recognized college. Fees would count, and books for prepping for TECEPs, too.