Can TurboTax fix their software so a under-24 student with live parents not be given an American Opportunity Credit that is not legal for her?

[gary-lund]

Instructions for Form 8863, page 6, line 7 instructions.

You don't qualify for a refundable American Opportunity Credit if:

2. At least one of your parents was alive at the end of 2018.  

[AlexisH]

Is it giving you the nonrefundable AND the refundable portion of the American Opportunity Credit?

[AlexisH]

Just to follow up-

You don't qualify for a refundable American opportunity credit if 1 (a, b, or c), 2, and 3 below apply to you. Did you indicate that the student provided over one-half of their support? If so they would qualify.

1. You were: 

a. Under age 18 at the end of 2018, or 

b. Age 18 at the end of 2018 and your earned income (defined later) was less than one-half of your support (defined later), or 

c. Over age 18 and under age 24 at the end of 2018 and a full-time student (defined later) and your earned income (defined later) was less than one-half of your support (defined later). 

2. At least one of your parents was alive at the end of 2018. 

3. You're not filing a joint return for 2018.

[gary-lund]

Wrong. If any one of the conditions are true you cannot get the credit. Both parents are alive so she does not qualify for the credit. Submitted with student providing over half of her support but that does not change anything because the parents are still alive.

[gary-lund]

Wrong. If any one of the conditions are true you cannot get the credit. Both parents are alive so she does not qualify for the credit. Submitted with student providing over half of her support but that does not change anything because the parents are still alive.

[AlexisH]

Hi Gary- In order for the student to not qualify for the refundable portion of the AOC you need to meet all conditions 1, 2 and 3. If the student provided over 1/2 of their own support both of the parents could be alive and the student would still qualify. Line 7 instructions on page 6 are located here <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/i8863.pdf">https://www.irs.gov/pub/irs-pdf/i8863.pdf</a>

[gary-lund]

I will simplify this for you. "You don't qualify for a refundable American Opportunity Credit if .....At least one of your parents was alive at the end of 2018".  Both parents are alive. The reason I had to report my daughter's income as more than half support is that on my 1040, if I used her as a dependent, I got a $500 Child tax credit, but she made more than the restriction on income.  There was no other way to remove this illegal tax credit, so I had to do my 1040 without her as a dependent.

[gary-lund]

I will simplify this for you. "You don't qualify for a refundable American Opportunity Credit if .....At least one of your parents was alive at the end of 2018".  Both parents are alive. The reason I had to report my daughter's income as more than half support is that on my 1040, if I used her as a dependent, I got a $500 Child tax credit, but she made more than the restriction on income.  There was no other way to remove this illegal tax credit, so I had to do my 1040 without her as a dependent.

[LisaS]

TruboTax can only calculate based on the information provided by the user.  If a user (in this case a student under 24) answers any of the "determining" questions in a way that they qualify then the other answers don't matter.  The way the instructions word it is that you don't qualify if ALL 3 of the conditions are met.  Therefor if any 1 of the conditions aren't met then you do qualify.

It also get tricky because the 1st question is true based on ANY of the 3 conditions (a, b, c) listed.

It would depend on how the user answered the question as to how TurboTax calculates.  For example, let's say your daughter is 20 (so now 1a is not true AND 1b is not true) and indicated that she provided more than half of her own support.  This would make all of question 1 not true.  That would be all that it takes to have them qualify (one "not true" statement means the entire statement is not true and therefore they don't meet the conditions to not qualify for the refundable portion of the credit).