Unlike the Hope Credit that this credit has temporarily replaced, the American Opportunity Credit is good for all four years of college, not just the first two.  This tax credit is based on 100% of the first $2,000 spent on qualifying college expenses and 25% of the next $2,000… for a maximum annual credit per student of $2,500.  The full credit is available to individuals whose modified adjusted gross income is $80,000 or less for married couples filing a joint return.