I am unable to claim my son as a dependent this year as he is only a part time student, is over 19 years old, and made more than $5050 in 2024. I have a few questions regarding his 1098T form.
1098T
Box 1: $12,278 (parents paid tuition)
Box 5: $1,000 (scholarship)
Box 8: checked, half-time student
Question #1: Just to double check, since I can't claim my son as a dependent, I cannot include the 1098T on my taxes, correct?
Question #2: If I include the 1098T on my son's taxes, he is eligible for the American Opportunity Tax Credit. However, he only had $51 withheld in taxes for 2024. Including the 1098T on his taxes gives him a $1,051 refund. Is this correct or am I missing something? Getting a refund larger than the amount withheld seems odd. Thanks.
Q. 1: Just to double check, since I can't claim my son as a dependent, I cannot include the 1098T on my taxes, correct?
A.1: Correct.
Q2:Including the 1098T on his taxes gives him a $1,051 refund. Is this correct or am I missing something? Getting a refund larger than the amount withheld seems odd.
A2: That is correct. The American Opportunity Credit (AOC) is 40% "refundable", meaning you get even if you do not have a calculated tax liability. What he doesn't get is the other 60% of the AOC ($1500).
If he had gone to school full time, or earned less than $5050, so he could be your dependent, you woulda got the full $2500 (depending on your income).
Here are the answers to your questions:
1. Correct. You cannot claim the education credits for him as he is not a dependent.
2. That's right. The American Opportunity Tax Credit is partially refundable, up to $1,000. That amount, coupled with his withholdings makes up the refund. See: IRS Education Credit FAQs