Early graduate - now in graduate school

[djenrette]

My daughter graduated college in 3 years and just completed her first year of graduate school in May 2018. Is she still eligible for the American Opportunity Tax Credit for tax year 2018, since at of the beginning of 2018, she had not completed the first 4 years of postsecondary education?

I'm trying to figure out whether to pay $4000 of non-529 funds for tuition in August.

[dcandmc]

I think the AOTC only applies to postsecondary education that leads to a first (bachelor's) degree. In multiple instances in IRS pub 970 ("Tax Benefits for Education"), the qualification for the credit is linked to "the freshman, sophomore, junior, and senior years of college."

https://www.irs.gov/pub/irs-pdf/p970.pdf

[mark]

Another point to make is you can only use AOTC for 4 years. 3 years of college could have covered 4 tax years because fall/spring semesters usually fall in different tax years. So, if you used AOTC 4 times already, that would also be another reason you couldn't use it.