We are eligible to take the American Opportunity Tax Credit. My daughter received scholarships in 2010 that brought the cost of tuition down. But my question is that we purchased a laptop computer for her last year to bring to college. She is living on campus. - Can her laptop be deducted as "needed materials" under the American Opportunity Tax Credit? The college has a library with computers in it for the students to use also.

Since there are other computers on campus and your daughter lives on campus, I don't think IRS would find it a need based item. Nice to have but not needed. If the computer was used to browse anything other than school work it isn't "needed". Music on it? Video's?