Part 1 Tax Credits question: fifth year of college

Part 1Tax Credits

Kai is in his fifth year of college in 2025. AOTC was claimed for him in each of the prior four years. He is enrolled at least half time. Which education credit is available for his 2025 tuition?

A The lifetime learning credit
B Both credits for the same expenses
C Neither credit
D The American opportunity credit

Show the answer and explanation

Answer: A. The lifetime learning credit

The American opportunity credit can be claimed for a student for no more than four tax years and only for the first four years of postsecondary education. After four years of claims, the lifetime learning credit (20% of up to $10,000 of expenses per return) remains available with no limit on the number of years. Both credits cannot be claimed for the same student in the same year. Source: IRC 25A(b)(2), 25A(c)(2)(A); Pub. 970 (2025). Tax year: 2025 (law as of 31 Dec 2025).

Common mistake

Allowing a fifth year of the American opportunity credit.

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Original study material mapped to the public IRS SEE content outlines; not a real exam question.Not affiliated with or endorsed by the IRS or PSI. Verify figures and rules against current guidance before relying on them.