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24 yo daughter not eligible for an lifetime learning credit

A 24 year old "kid" that made more ~$4,200 (actually, $11,500) in 2023 has effectively aged out of being their parents tax dependent, but at least the kid started a real job by October 2023 after graduating with a Masters in August.   Kid (Dad, really) does the 1040 as "single" on TurboTax claiming 1 as the kid.  Dad already claimed the Amer. Oppty Credit for 4 years in the past.   Spent about $4,500 in tuition and books in 2023.  Turbo Tax says:

 

"You can't claim an education tax break.  Based on what you've entered so far you are not eligible for an education credit.  Here is why you may not qualify: 1. Somebody else can claim you as a dependent on their return  2. There is no taxable income in your return 3. There were no net qualified education expenses."

 

So, 1 & 3 don't apply as described above.  Does 2. apply because kid's gross income was less than $13,850?

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24 yo daughter not eligible for an lifetime learning credit

The Lifetime Learning Credit is non -refundable.  It can only be used to reduce a tax liability.  And your daughter did not have enough income to have a tax liability.   Her standard deduction is $13,850.  She earned less---so all of her income is already "tax free."   And ----since you cannot claim her as a dependent now, you cannot use the credit on your return.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

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4 Replies

24 yo daughter not eligible for an lifetime learning credit

The Lifetime Learning Credit is non -refundable.  It can only be used to reduce a tax liability.  And your daughter did not have enough income to have a tax liability.   Her standard deduction is $13,850.  She earned less---so all of her income is already "tax free."   And ----since you cannot claim her as a dependent now, you cannot use the credit on your return.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Hal_Al
Level 15

24 yo daughter not eligible for an lifetime learning credit

Q. Does 2. (There is no taxable income in your return) apply because kid's gross income was less than $13,850?

A. Yes.

24 yo daughter not eligible for an lifetime learning credit

Thanks to xmasbaby0 for holding my hand and confirming my suspicions.  I told my kid they were in a tax "donut hole" since she made too much to be a tax dependent and too little to get credit on tuition costs 😉

24 yo daughter not eligible for an lifetime learning credit

Hal_Al, I appreciate the succinct answer from another level 15, thanks!

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