March 22, 2010
Under the American Recovery and Reinvestment Act of 2009, City College students filing their own tax returns can reap rewards from a variety of new deductions and tax credits aimed at offsetting the rising cost of higher education.
“Now the new credit — this American Opportunity Credit — is probably the most generous,” said Shanna Stein, City College professor of accounting. “The new credit has a max credit of $2,500, but the Higher Education Tax Credit has a $4,000 deduction, but that’s different because it is a deduction. A deduction reduces your taxable income. A credit reduces your tax. Credits are good, deductions are good too, but credits are better.”
“I think it is [a good credit] for students,” said full-time City College student Jones Robinson. “Because students can get that money back for expensive books that maybe they thought were overpriced.”
According to the Internal Revenue Service, the new credit modifies the existing Hope credit for tax years 2009 and 2010, making it available to a larger range of taxpayers, including many in higher income brackets and those who owe no tax.
“The Hope credit’s been around a number of years. So student have always known they’ve got a…» Read More