American Opportunity Credit not eligible

[bellis777]

Hello there,

I don't entirely understand why I'm not able to get the AOC this year (TurboTax says I'm not eligible) when I have two years prior.  Here's my situation:

• My daughter was not a dependent in 2019 (she was a dependent the prior two years).
• I received 529 distributions via a 1099-Q for $1716 ($390 was earnings and $1326 was the basis). I'm the custodian and my daughter is the beneficiary.
• Total school expenses were $1717.
• I did not hit the income threshold to not receive the benefit.

After reviewing some IRS documents, it appears my daughter must be a dependent for me to claim the credit? Does this mean she can claim it? Seems kind of wonky for me to pay for school, but not yield the benefits. Please advise. Thanks!

[xmasbaby0]

You cannot get the education credit unless your child is claimed as a dependent on your tax return.  Why did you not claim her?  How old was she at the end of 2019?  Was she 24 by the end of the year?  Or not a full-time student in 2019?

WHO CAN I CLAIM AS A DEPENDENT?

You can claim a child, relative, friend, fiance (etc.) as a dependent on your 2019 taxes as long as they meet the following requirements:

Qualifying child

• They are related to you.

• They cannot be claimed as a dependent by someone else.

• They are a U.S. citizen, resident alien, national, or a Canadian or   Mexican resident.

• They are not filing a joint return with their spouse.

• They are under the age of 19 (or 24 for full-time students).

• No age limit for permanently and totally disabled children

  •      They live with you for more than half the year (exceptions apply).

Qualifying relative

• They don't have to be related to you (despite the name).

• They cannot be claimed as a dependent by someone else.

• They are a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.

• They are not filing a joint return with their spouse.

• They lived with you the entire year.

• They made less than $4200  (not counting Social Security)

• You provided more than half of their financial support. More info

When you add someone as a dependent, we'll ask a series of questions to make sure you can claim them.

Related Information:

• Does a dependent have to live with me?

• What does "financially support another person" mean?

• Can I claim a newborn baby?

[bellis777]

Thanks. So, I assume she can claim it?

The reason she's not a dependent is because she lives away from home and pays all of her own expenses, except for school.

[xmasbaby0]

Even if all of that is true--if she fits the criteria for qualified child--you can claim her.  Living away at school is just a "temporary absence" --you can still say she lived with you.

[Hal_Al]

Q. I assume she can claim it?

A.  No. Or, more accurately, probably not.

 A full time, unmarried student, under age 24, is only eligible for the refundable portion (up to $1000) of the American Opportunity Credit if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans or student loans & grants. You must have actually paid tuition, not had it paid by scholarships & grants.  It is usually best if the parent claims that credit.