Obama’s stimulus package greatly increases the tax credit to people with kids in college (thousands of dollars). This from Vanguard:
But the most rewarding now appears to be the new American Opportunity Tax Credit. A part of the economic stimulus bill signed into law February 17, 2009, it improves upon the existing Hope credit in three ways:
- More money. The new tax credit is larger, up to $2,500 per student versus a maximum of $1,800 for the Hope credit in 2008.
- Covers all four years. You can claim the new credit for expenses incurred by students in any of the four years of college. The Hope credit applied only to freshmen and sophomores.
- More people will qualify. The qualifying income limits were raised significantly so more middle- and upper-income families should be eligible to receive the credit
…and credits are better than deductions! This is money off the top. Having 2 in college, this is good news for me! I am very stimulated!! Yay!!! The income level for the full credit was raised from $96000 a year to $160000 a year, which will help a lot of richer people. It also helps poorer people too – if you do not owe the government as much as the credit is worth – Uncle Sam will send you the difference as a tax refund.
My tuition bill is huge – about 60K for the year, but both Josh and Hannah have good scholarships. We just got the news about Josh’s scholarship, and it will pay a good chunk of his.