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DAVID GREENE, HOST:
As we head into the holiday season, political leaders are un-merrily locked in a battle over how to cut federal spending and raise revenue - and this could mean meddling with tax deductions that many Americans hold dear.
RENEE MONTAGNE, HOST:
So this week and next, we're taking a closer look at individual deductions and tax credits that might be on the chopping block.
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GREENE: We're calling it our Twelve Days of Deductions. And today, a tax credit that the president holds dear. It's the American Opportunity Credit, it helps families pay for college tuition.
MARK LUSCOMBE: This one goes back to the 2009, so this is really was new with the Obama administration and it really enhanced a prior provision in the code called the Hope Credit.
GREENE: That's analyst Mark Luscombe of CCH, a unit of Wolters Kluwer, says the new credit boosted the maximum that families could receive - to $2,500.
MONTAGNE: It raised income limits and increased number of years you could receive the credit, from two to four. It also became refundable.
LUSCOMBE: A refundable credit, that means that basic you get the credit whether you owe any tax or not, so that helped low income tax payers.
MONTAGNE: And lawmakers will have to take action on this, because the American Opportunity Credit expires at the end of the year.
GREENE: Extending it would cost the government an estimated $10 billion. Now if there's no action, it automatically reverts back into the less-generous Hope Credit.
Tomorrow, we'll have a look at Section 179. That might sound a little bland, but it's a nice boost for businesses. Transcript provided by NPR, Copyright NPR.