Significantly Reduce or Zero Out Course Material Costs with the American Opportunity Tax Credit

Contact: publicrelations@nacs.org

OBERLIN, OH (August 23, 2021)–The National Association of College Stores (NACS) is supporting the #TaxBreaks4Students campaign. Led by Illinois Congressman Danny K. Davis, the campaign aims to create an awareness of and encourage the nation’s 21 million college students to find out if they qualify for educational tax breaks such as the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC).

Thanks to the federal Higher Education Emergency Relief Fund (HEERF) and other sources of funding, colleges and universities across the country are distributing an unprecedented amount of emergency and additional grant aid to students. In many cases, institutions are also covering all or a portion of the cost of required course materials for students in the new school year. For students who still have out-of-pocket costs for course materials and tuition and fees, the AOTC can significantly reduce or eliminate out-of-pocket costs of course materials. 

College stores across the country are working to raise awareness of the value of the tax credit for students and families and the need to save receipts this fall for tax filing season in the spring.

“Millions of students and their families who are struggling to pay for college may not realize that they’re eligible to take advantage of education tax benefits whether they receive financial aid or not,” said Richard Hershman, NACS’ vice president of government relations. “The AOTC provides up to $2,500 a year of the out-of-pocket cost of tuition and qualified education expenses including books, supplies, and equipment needed for a course of study, paid during the taxable year for the first four years of college. Forty percent of the credit is refundable, with the maximum refundable amount of $1,000 allowing taxpayers with zero tax liability to receive a refund.”

The credit can significantly offset or eliminate what was spent on course materials, supplies, and equipment for the average student in their first four years of college. These are benefits students and their families should be aware of, Hershman said.

Key features of the AOTC include:

• Up to $2,500 per student a year for tuition, fees and course materials.
• Don’t make enough to owe taxes? You STILL may qualify for up to $1,000.
• For students who are at least half-time in a degree or certificate program, or a program leading to recognized education credential.
• Can be used for four years of higher education as long as the school is eligible to participate in a federal student aid program administered by the U.S. Education Department.
• Available to individuals with less than $90,000 or joint return filers with less than $180,000 in income.
• Are you an undergraduate? Job training student? Apprentice? See if you qualify https://www.irs.gov/help/ita/am-i-eligible-to-claim-an-education-credit 
  
  

Students not qualifying for the AOTC may qualify instead for up to $2,500 per year (starting in 2021) for out-of-pocket tuition and fees, per return, through the Lifetime Learning Credit. The campaign urges students to check out IRS resources to see whether they qualify for these important benefits. 

“We applaud Congressman Davis and his staff and appreciate their leadership to create awareness around the important issue of college affordability,” Hershman said. “Combined with proactive campus-based efforts underway to make course materials more affordable for students, that has helped reduce annual spending on course materials by 28% since five years ago—$602 to $456—the tax credits go a long way to help students succeed in their academic careers and beyond.” 

Students and their families can find out if they qualify for these benefits by visiting http://go.usa.gov/Jvej. Or, check out information from NACS’ www.textbookaid.org website or from the following tweets from the IRS:

#IRSTaxTip – See if you qualify for college tax credits http://go.usa.gov/Jvej #American_Opportunity_Tax_Credit #IRS

#IRSTaxTip – See if you qualify for college tax credits http://go.usa.gov/Jvej #Lifetime_Learning_Credit #IRS 

#Education Tax Credits Help Pay Higher Education Costs http://go.usa.gov/Jvej #AOTC 

Do you qualify for an #education credit? Check out IRS #Interactive_Tax_Assistant On-line Tool at https://www.irs.gov/help/ita #IRS 

#Lifetime Learning Credit can help with #education costs to improve job skills. Get the facts at http://go.usa.gov/Jvej

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About The National Association of College Stores: The National Association of College Stores (NACS) is the professional trade association representing the collegiate retailing industry. NACS represents campus retailers and industry-related companies that supply course materials and other merchandise and services to campus stores. NACS provides education and other resources that help its member stores support student success, the campus experience, and the missions of higher education institutions.

NACS has been a longtime advocate for reforms to the federal education tax benefits calling on Congress to streamline and simplify the tax benefits making them better aligned to students’ and family’s needs and including course material and related technology costs as eligible expenses.