BobKamman
Level 15

I think you’re relying on the descriptive header of the relevant paragraph in Section 25A, and not the words of the Code itself.

(C) Credit allowed only for first 4 years of postsecondary education
       –that’s just the headline, the news is what follows.

The American Opportunity Tax Credit under subsection (a)(1) shall not be allowed for a taxable year with respect to the qualified tuition and related expenses of an eligible student if the student has completed (before the beginning of such taxable year) the first 4 years of postsecondary education at an eligible educational institution.

So you’re talking about the student who graduates in May and starts a master’s degree program in September. At the start of the year, she has not completed the first four years. So any expenses paid during the calendar year would qualify, including the first semester (or quarter, which the best schools use) of the postgraduate program. Regulations are not needed when the plain language of the statute is unambiguous.

0 Cheers