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The revamped federal tax credit for higher education expenses has nearly doubled the amount of money flowing to American taxpayers, the Obama administration said in a report released today. The report was issued as President Obama plans a speech today urging Congress to make permanent the expanded tax credit, known as the American Opportunity Tax Credit, which was enacted last year as part of the economic recovery legislation. According to the report, which was prepared by the Treasury Department, 12.5 million students and their families benefited from the tax credit in 2009, about 50 percent more than took advantage of the two tax benefits that the expanded tax credit replaced. The average recipients earned a credit of more than $1,700, up about 75 percent over the average Hope Credit or Lifetime Learning Credit recipient in 2008. About 4.5 million recipients earned the new credit because it is refundable, which neither the Hope Tax Credit nor the Lifelong Learning tax deduction were.
