College Credits: AOTC vs Lifetime Learning Credit

[taxes]

I am doing a return for a new client who took the Am Opp Tax Credit for his son's 1st and 2nd and 3rd years of college. Year 4 he took the Lifetime Learning Credit (LLC) even though his son qualified for the AOTC as he was a full-time student. In 2022, the son was full-time in the spring semester then graduated. Is he eligible for the AOTC in 2022 since he only took the AOTC for 3 years even though in 2021 he could have taken the AOTC but opted for the LLC?  

Technically, he meets the requirements: more than half-time student, attending a qualified university, had not finished his 4th academic year as of 1/1/2022, and had only taken the AOTC for 3 past years.

It seems like a savvy tax strategy as it maximizes the amount of college credit one student can take over 4 academic years (5 tax years if they start in the fall semester), but is only possible if the tax preparer does not check the 'full-time student' box on the Taxpayer Student Info W/S. IRS literature says you cannot take both credits in the same year, but I cannot find anything about taking the LLC in between the ATOC.

[rbynaker]

Yes, the facts as presented allow a 4th year of AOTC.  Since the student is still an undergrad on 1/1/22 both the undergrad expenses and grad school expenses count for 2022.  It's a quirky rule.

[Frustrated-in-IL]

This is not uncommon at all.  Quite often I see a student leave a 4 year school and comes back home to attend a community college before heading to another 4 year college.  Instead of wasting the AOTC on community college tuition which doesn't hit $4000, the Lifetime Learning Credit is chosen even if full-time.  This saves the AOTC for a later year when it can be fully utilized.