An independent calculator, built to be correct on the AOTC.

Who runs this

529orcash.com is published by Red Goggles LLC, an independent operator of free web calculators and reference tools. We are not a 529 plan, a broker, a financial institution, or a government agency, and we are not affiliated with the IRS. We don't sell investments, we don't collect leads, and we don't take your information — the calculator runs on your device and nothing you type is sent to us.

Why this site exists

Every "529 calculator" from the big providers is a how-much-to-save projector. Almost none tells a parent already paying for college the one thing that's worth real money: an expense paid with a tax-free 529 distribution can't also generate the American Opportunity Tax Credit. Pay tuition entirely from the 529 and you can forfeit a credit worth up to $2,500 per student. Several 2026 articles even state the maximum wrong — as "$2,200." Being right about the $2,500 figure, and showing the exact cash-vs-529 split that captures it, is the entire reason this tool exists.

How it's calculated

The estimate follows the published IRS rules for the education credits, applied in the open:

• AOTC amount (IRS Pub 970 / Form 8863) — 100% of the first $2,000 of qualified expenses plus 25% of the next $2,000, for a $2,500 maximum per eligible student, up to $1,000 of it refundable.
• The $4,000 cash carve-out — because the credit maxes at $4,000 of qualified expenses, the tool sizes the non-529 (cash) payment to cover $4,000 of AOTC-qualified tuition, fees, and required course materials, then routes the rest to the 529.
• What each bucket can pay for — AOTC-qualified expenses are tuition, required fees, and required course materials, not room & board; 529-qualified expenses are broader and do include room & board. The clean coordination pays room & board from the 529 (the AOTC can't use it anyway) and reserves the cash carve-out for tuition and fees.
• MAGI phaseout and eligibility — the credit phases out over a MAGI band and requires first-four-years, at-least-half-time, degree-seeking status, among other rules; when the AOTC isn't available the tool points to the Lifetime Learning Credit instead.

The full method is spelled out on the calculator page under How it works and The strategy.

How we stay accurate and current

On a topic where the affiliate blogs get the headline number wrong, correctness is the whole product. We anchor every dollar figure to IRS primary sources — Publication 970 and Form 8863 — and carry a dated "reflects current law" note. The AOTC and its phaseout thresholds, and any 529 rule changes, can move; we update figures against the primary source as they're published. We don't model state 529 deduction or recapture rules — those vary by state, so we flag them and tell you to check your own.

How the site is funded

529orcash.com is free and supported by display advertising. Advertising is kept calm and never mixes with your inputs — see our privacy page for exactly what is and isn't collected.

Questions or corrections? We take accuracy seriously on a figure this consequential — reach us on the contact page.