Question

Education Tax Credit - In 2017 Paul and Karen Mitchell pay $12,000 for their daugher's tuiition for spring and fall semesters. Their daugher is a full time graduate student. They also paid $3,800 for their son's tuition for the spring and fall semesters. In the fall of 2017, the son began his sophomore year in college. He attends college full time

a) Compute the Mitchells 2017 education tax credit if their AGI is $122,600 how much is refundable vs nonrefundable?

b) compute if AGI is $174,360 ?

Answer 1

According to Law-

Tax Break	Maximum Benifit	Qualificatin	AGI(SINGLE)	AGI (Married)
American Oppportunity Tax Credit	$2500 per student	Degree programme	$80000 to $90000	$160000 to %190000
Life Time Learning	$2000 Per student	Low to Modrate income	$55000 to $65000	$110000 to $130000
Tution and fees deduction	$ 4000 Deduction	N/A	$65000 to $80000	$130000 to %160000

So from the above we can answer the asked question

(a) if AGI is $122600 than Mr Mitchells get $2000 per studend hence $4000 tax credit as refund and no deduction form AGI

(B) if AGI is $ 174360 than Mr Mitchells get nothing as tax credit as well as no deduction from AGI.