American opportunity credit

[Connor9]

So I earned $5755 while using savings for most my expense in 2024. The tuition paid was $8,490. My aunt paid $6,120 which I’ll be paying back but I read it qualifies as a gift. The I had loans paying $3,740. I paid $489.56 myself and had a scholarship pay $750. I paid for all my books myself which were $400. I also paid all rent and food. I fit all the qualifications but I don’t know about the 1/2 of support. I’m just trying to figure out if I should take it or not. 

[MaryK4]

You can use the IRS Worksheet to determine if you provided more than half of your support.  See Worksheet 2. Worksheet for Determining Support.  Even if you had the funds, if you did not pay the support you cannot use the amounts to determine if you provided your own support.  If someone claims you as a dependent on their tax return, you cannot claim the American Opportunity Credit so you want to make sure you qualify.

[Connor9]

I’m not filed as a dependent and I paid my own rent and everything. Rent was over 7600 

[Hal_Al]

The "did you provide more than half your own support" rule is for determining if you can be claimed as a dependent or not. A quick peruse of the numbers you provided indicates that you cannot be claimed as a dependent. 

But there is a different support test for whether you can claim the AOC, if you are under 24.  You must have provided more than half your support with your own earned income. The $5755 you earned working does no appear to do that.  Since you can't be  a dependent, you appear to be in that situation where nobody can claim the AOC. 

There's a new urban myth among college students that says they can get a $1000 from the government just for filing a tax form. For most of them, they simply aren't eligible. A full time unmarried student, under age 24, even if you don't qualify as a dependent, is only eligible for the refundable portion of the American Opportunity Credit (AOC) if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans or student loans & grants. It is usually best if the parent claims that credit. 

You cannot claim the (up to) $1000 refundable credit if you are, or can be, claimed as a dependent by someone else.

Reference: Line 7 instructions for form 8863.

https://www.irs.gov/instructions/i8863#en_US_2024_publink53002gd0e674

[Connor9]

Hi I’m sorry I was confused and read off my ago from 2023. In 2024 I made a little over 27k.

[Hal_Al]

When TurboTax (TT)  sees, In the personal info section of TT, that you are a full time student, under 24, it will generate the question about support from earned income. Answer yes and you will get the AOC. 

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