Brown: Ohioans need to apply for credit

WASHINGTON, D.C. – Ohio families have more than $700 million in unclaimed college tuition tax credits, according to a new estimate released by U.S. Sen. Sherrod Brown (D-Ohio). During a news conference call today, Brown announced a campaign to make sure all eligible families utilize the $2,500 American Opportunity college tuition tax credit (AOTC). Brown is encouraging families to file this year for the tax credit, which was passed as part of the Recovery Act and extended by the bipartisan tax compromise.

“Middle class Ohio families are missing out on millions of dollars in tax relief for one of the most important investments they make – a college education for their children,” Brown said. “As college costs continue to rise, $2,500 can go a long way toward helping Ohio families afford college costs. While only 35 percent of Ohio families filed for this credit last year, it’s not too late for families to claim this important tax credit.”

Brown released an analysis with county-by-county figures on the number of Ohio families missing out on the credit. Last tax year, this credit provided Ohio families paying tuition with an average of $1,918 in tax relief per student.

The AOTC provides critical relief to middle class families — providing a $1 tax credit for each $1 dollar spent on college tuition — but is only utilized by an estimated 35 percent of Ohio student families. The total tax credit is worth up to $2,500, with the dollar-for-dollar match in effect for the first $2,000.

Brown’s estimate is based on a recent report released by the Treasury Department, which estimates that 35 percent of eligible families in Ohio did not file for the AOTC in 2009.  This percent was then applied to the county-by-county data released by the Ohio Board of Regents on the number of students enrolled at institutions of higher education. The estimate is also based off the fact that 95 percent of Ohio families are eligible for the credit.

This analysis showed that as many as 621,628 families in Ohio that could benefit from the American Opportunity Tax Credit did not claim it during the last filing year. At an average tax credit of $1,918, this means that there were more than $736 million in unclaimed American Opportunity Tax Credits during the last filing year. Ohioans can amend their prior tax returns to claim the credit in Tax Year 2009.

Earlier this week, Brown sent a letter requesting that Ohio Board of Regents Chancellor Eric Fingerhut and Ohio college and university presidents allocate all available resources to informing prospective and current students about the AOTC, along with information about their need to claim 2010 higher education expenses on their April tax filings.