American Opportunity Credit for graduating senior

[ptc]

Can my daughter claim the American Opportunity credit? TT thinks she can. She graduated June 2017, never claimed any type of credit before and since graduating and starting work is no longer my dependent. So TT thinks she can claim for tuition paid in her last 2 quarters. Is this legit?

[AnthonyC]

One of the followup questions likely wasn't answered correctly.  You are limited to the first 4 years of secondary education and also you can only claim the AOC for a total of 4 tax returns per student.  This would include the years that she was a dependent on your return.  So, even though she may have never claimed the credit on her own return, because she was the student that the credit was based off of on your return, you would need to include those credit years on her return.  TurboTax has a followup question in the Education interview that specifically asks how many years a credit was claimed (which would normally have been 4 already - though you can check your records if unsure).

[ptc]

Thanks for the reply Anthony.

Neither of us have claimed before as my income was too high and still would be.

Since she became independent in 2017 TT is saying she qualifies - her income is below the threshold. I'm just wondering if there's anything else missing as it kinda seems counter to the intent of AOC. Maybe it's just a nice quirk of the rules - would make up for a previous time when it went the other way...

[AnthonyC]

Yes, as long as she hasn't completed the first 4 years of secondary education before 2017.  I assumed from what you were saying that she was still a senior in spring of 2017 and also not a dependent for 2017.  Under these facts, she would be eligible for the AOC for that last semester.  

One possible hiccup though is that you can only use expenses that were actually paid in 2017 to calculate the credit for 2017.  Since its a spring semster, somtimes this can be a problem if expenses were paid early or prepaid in 2016.  You would want to check your records.