New American Opportunity Tax Credit
President Barack Obama has proposed a new American Opportunity Tax Credit. Should this truly come to pass, it can provide tremendous financial assistance for students by offering tax credit in return for a requisite amount of community service. Tax credit is often of more benefit than tax deductions.
Essentially, the tax credit would be offered to those willing to contribute 100 hours of community service. In turn, up to $4,000 would be given as a tax credit to offset the cost of tuition. It is important to note as well that the amount of credit is paid directly to the educational institution and treated as payment of such. According to President Obama’s campaign website, this will cover two-thirds the cost of tuition at the average public college or university and make community college tuition completely free for most students.
This tax credit passed through the House of Representatives successfully as bill H.R. 106; it is a part of the larger American Recovery & Reinvestment Act of 2009. Currently, it is awaiting passage in the Senate. It states that the 100 hours of community service can be satisfied by volunteering at a) a governmental unit b) a hospital or c) a charitable organization.
