<p>I saw a lot of conflicting info on the Web about this, so I want to ask a few clarifying questions.</p>
<ol>
<li><p>Does the AOC cover a computer as long as a course the student takes requires a computer? Can the course be any course that offers college credit, even ones that do not relate to the students’ major and are not requirements for graduation?</p></li>
<li><p>According to this website ([Tax</a> Benefits for Education: Information Center](<a href=“http://www.irs.gov/newsroom/article/0,,id=213044,00.html]Tax”>http://www.irs.gov/newsroom/article/0,,id=213044,00.html)), “in general, expenses for computer technology are not qualified expenses for the American opportunity credit, Hope credit, lifetime learning credit or tuition and fees deduction.” If I meet the computer requirements for the AOC, does this not apply?</p></li>
</ol>
<p>Generally, an expenditure for a computer would qualify for the credit only if the computer is needed as a condition of enrollment or attendance at the educational institution. This phrasing leaves out a condition of a particular class.
The IRS web site is notoriously bad at having old information on regular pages. What you need to do is look at actual IRS publications on their site. You question likely can be answered by Publication 970.</p>
<p>Be sure you have documentation that the class was required for the program and that the computer was required for the class, and save that info along with your other expense records.</p>
<p>If your 1098-T doesn’t show the expense, or enough tuition otherwise for you to claim the credit, expect to get a letter from the IRS some time down the road.</p>
<p>Unless the school requires everyone to own a computer, I doubt a course requirement would apply, there are almost certainly school computers available for use by students.</p>
<p>Pub 970:
“… However, expenses for books, supplies, and equipment needed for a course of study are included in qualified education expenses whether or not the materials are purchased from the educational institution…”</p>
<p>If a specific computer is required in a course of study, it should included in the qualified education expenses.</p>
<p>For a couple of years you could use 529 account money to pay for a computer. I think the last year you could do that was the 2010 tax year.</p>
<p>My understanding is that you can only uses the AOC credit for books and supplies that are required by a program. In mos cases it is not required that a student own a computer though there are a limited number of programs that do require it. So in most cases the anser would be no. From the IRS website:
<p>Computers were allowed in 2009 and 2010, the first two years of American Opportunity Credit. The credit was extended for 2011 and 2012, but the eligibility of money from 529 used for a computer was not.</p>
<p>If you are fortunate enough to have contributed enough into your 529 to cover tuition, do not use it to pay the entire bill. Money coming from a 529 account does not count toward qualification for the American Opportunity credit. Save it for the following year, when AOC might not exist. It will sunset this year unless congress acts to either extend it or make it permanent.</p>
<p>We can only hope that it is extended. It’s just a small part of the “financial cliff” we keep reading about. I can see things extending well into 2013 before we have any answers…</p>