The American public is in a waiting pattern right now — waiting for the unemployment rate to go down, waiting to find out what is going to happen to tax cuts created during the previous administration and even waiting on information about tax credits generated by the Recovery Act. One of these tax credits is the American Opportunity Tax Credit, which offers a $2,500 tax credit for qualified higher education expenses.
During a Wednesday afternoon speech, President Obama urged Congress to make the American Opportunity Tax Credit permanent.
“At a time when the unemployment rate for folks who’ve never gone to college is almost double what it is for those who have gone to college, when most of the new jobs being created will require some higher education, when countries that out-educate us today will out-compete us tomorrow, offering our children a world-class education isn’t just a moral obligation, it’s an economic imperative.”
The green jobs of tomorrow require an advanced education, even the most basic of these green jobs requires specialized training. This training can be obtained at community colleges or four-year universities, but for individuals who don’t qualify for a free or subsidized training program, the costs can be prohibitive. The American Opportunity Tax Credit, if made permanent, can help the youth of our nation better prepare for the clean energy economy of the future. This benefits the youth directly but it also benefits the entire country.
One of the biggest draws of the American Opportunity Tax Credit, especially when compared to the Hope and Lifetime Learning Credits, is the higher income phase outs. The full $2,500 annual credit is available to individuals with a modified adjusted gross income (AGI) of less than $80,000 or married couples filing jointly with a modified AGI of less than $160,000. This opens up the credit to more middle-class families, who typically feel the higher education squeeze more than others.