Economic stimulus bill adds computer expenses as 529-eligible
Not eligible are the expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature.
The Act also provides for the American Opportunity Tax Credit, essentially a supercharged Hope Scholarship credit for years 2009 and 2010 only. The maximum credit is boosted to $2,500, consisting of 100% of the first $2,000 of eligible expenses plus 25% of the next $2,000 of eligible expenses. The credit is allowed for thefirst 4 years of post-secondary education, instead of just 2 years. Eligible expenses are expanded to include course materials. The credit may be claimed against alternative minimum tax, and up to 40% of the credit is refundable for taxpayers not eligible to be claimed as someone else's dependent. Finally, the income phase-out is increased to $80,000 - $90,000 ($160,000 - $180,000 for joint filers).