Determine if you qualify for this form of financial aid that is a tax credit, not a direct payment. Family income must be less than $80,000 or $160,000 for couples to get full credit. More than $90,000 gets no credit, but there is a "phase out" for between $80,000 and $90,000. Likewise, family income less than $180,000 can qualify for part of the benefit.
You must be enrolled in college in 2009 or 2010. You must attend school for at least half time.
See what the benefits are. The American Opportunity College Tax Credit is just that--a credit on taxes. However, it is also partially refundable, meaning that even if you owe no taxes, you can get part of it back. The maximum is $1000 under the law for the refund, but the maximum CREDIT at 100% is $2000. This means that if you have $2000 in expenses, you can take that amount off your taxes. BUT if you have no tax liability, you can still get $1000 of it back as a refund.
The next layer or $2000 in expenses is credited at 25%.
Although the previous financial assistance provided by the HOPE credit was only for two years, this is a replacement that will cover up to four years. If you have taken your HOPE credit, you can still qualify for two more years under this credit.
Know what is included. This package includes more than tuition. It also covers books and "related expenses."
Contact the college or university where you are planning to attend, and be SURE they qualify as a qualified institution of higher learning.