American Opportunity Tax Credit is available for the first four years of undergraduate college education. The credit is worth up to $2,500 and is equal to 100% of the first $2,000 of qualified tuition and related expenses and 25% of the next qualifying expenses. Qualified expenses are tuition and related expenses. Added bonus: Up to 40% of the credit is refundable, meaning that your refund can be greater than the amount of taxes you paid. The credit does phaseout for higher income taxpayers.