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krusesac
Level 2

Can I receive the American Oppurtunity Credit if my parents paid for my school but cannot claim me as a dependent and i received a 1098-T from my university?

 
7 Replies
ThomasM125
Employee Tax Expert

Can I receive the American Oppurtunity Credit if my parents paid for my school but cannot claim me as a dependent and i received a 1098-T from my university?

Yes, the money your parents pay is considered a gift which you then use towards your education expenses. 

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Hal_Al
Level 15

Can I receive the American Oppurtunity Credit if my parents paid for my school but cannot claim me as a dependent and i received a 1098-T from my university?

Maybe,  but probably not. We need to know more*.

 

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, is only eligible for the refundable portion 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 usually must have actually paid tuition, not had it paid by scholarships & grants.  It is usually best if the parent claims that credit. 

You cannot claim a credit if you are, or can be, claimed as a dependent by someone else.  See  full rules at https://www.irs.gov/Individuals/AOTC

 

* Why can't your parents claim you as a dependent? 

How old are you?

How much is your income and what is the source?

Who do you live with? When you are away at school, even living off campus, you are still considered as residing with your parents

krusesac
Level 2

Can I receive the American Oppurtunity Credit if my parents paid for my school but cannot claim me as a dependent and i received a 1098-T from my university?

I paid for more than half of my own support. I started college in fall of 2015 and graduated in May of 2019, in June I moved out of my house and started a full time job.... my salary was around 40k

krusesac
Level 2

Can I receive the American Oppurtunity Credit if my parents paid for my school but cannot claim me as a dependent and i received a 1098-T from my university?

I am 23 btw

krusesac
Level 2

Can I receive the American Oppurtunity Credit if my parents paid for my school but cannot claim me as a dependent and i received a 1098-T from my university?

My tuition was 5340.50 and my scholarships where 3497.00, so the tuition that was paid by my parents was the difference 1843.50.

Hal_Al
Level 15

Can I receive the American Oppurtunity Credit if my parents paid for my school but cannot claim me as a dependent and i received a 1098-T from my university?

Yes, you can claim the AOC, assuming your parents didn't already  claim it the maximum 4 times allowed (2015-18 is four tax/calendar years, so there's a good chance they did).  You'll have to check with them.  If so, you would still qualify for the Lifetime Learning Credit (LLC) but that's not as generous. 

 

You are correct, you do not qualify as their dependent. At $40K salary, you most likely meet the earned income support test and it should not be necessary to run the support calculations.

 

 If Turbotax (TT) is not giving you the AOC, you'v answered something wrong in the interview (other than the 4 times thing mentioned above)

 

If you declare $2156.50 (4000-1843.50) of your scholarship as taxable income, you can use the max  $4000 of tuition to claim the maximum AOC.   Declare the full scholarship as taxable to claim the maximum LLC.

krusesac
Level 2

Can I receive the American Oppurtunity Credit if my parents paid for my school but cannot claim me as a dependent and i received a 1098-T from my university?

Awesome thank you for confirming! I don’t have to worry about them claiming the AOTC credit in the past because their AGI exceeds the AGI limit to receive the credit.

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