An educational estimate — not advice.

Not professional advice

The information and estimates on this site are provided for general educational purposes only. They are not tax, legal, financial, or investment advice, are not a substitute for advice from a qualified professional, and don't create any advisory relationship. Decisions about which account pays which expense, and which education credit you claim, have real tax consequences — before you act, confirm your situation with a tax professional or the IRS.

Estimates, not determinations

The calculator produces an estimate, not a tax determination or a guarantee of any credit amount. In particular:

• AOTC amount. The tool applies the IRS formula — 100% of the first $2,000 of qualified expenses plus 25% of the next $2,000, up to a $2,500 maximum per eligible student. Your actual credit depends on your final qualified expenses, your MAGI, and your eligibility, all reconciled on Form 8863.
• The cash-vs-529 split. The recommended $4,000 cash carve-out assumes you have that much in AOTC-qualified tuition, fees, and required course materials. The no-double-dipping rule means an expense paid with a tax-free 529 distribution can't also generate the credit; the tool sizes the split around that rule, but your own records govern.
• MAGI phaseout and eligibility. The credit phases out over a MAGI band and carries eligibility rules (first four years, at least half-time, degree-seeking, and others). Confirm the current thresholds and rules against the IRS before relying on a partial-credit figure.

Time-sensitive and subject to change

Education-credit figures and rules can change from year to year, and 529 rules can be amended by legislation. This tool models the American Opportunity Tax Credit as described in current IRS guidance for the tax year shown on the calculator page. It does not model state 529 income-tax deductions or recapture on non-qualified withdrawals — those vary by state and can affect the right move near year-end. Verify current figures and any recent legislative changes with primary sources before you act.

Verify before you rely on it

For the authoritative rules and to prepare your return, use IRS Publication 970, Form 8863, and the IRS education-credits guidance, and check your own state's 529 rules. We do our best to keep figures accurate and to cite primary sources, but we make no warranty of accuracy or completeness and accept no liability for decisions made based on this site. See our terms of use.

No affiliation

529orcash.com is an independent tool operated by Red Goggles LLC. It is not affiliated with, endorsed by, or connected to the IRS, any 529 plan or program, or any financial institution.

Last updated: June 2, 2026