A modification of the former Hope Scholarship Tax Credit, AOTC provides up to $2,500 a year for eligible postsecondary education expenses including course materials, with gross income limitations and up to 40% of the credit being refundable.
Qualified higher education expenses are necessary for taxpayers or dependents to apply for tax benefits like the American Opportunity Tax Credit, the Coverdell Education Savings Account, and the Lifetime Learning Credit.
The Hope Scholarship Credit was a tax credit that provided financial assistance for higher education expenses but was replaced in 2008 by the American Opportunity Tax Credit.
