education credits

[irsisannoying]

I totally get that we have always been unable to take either the Lifetime Learning Credit or the American Opportunity Credit due to income higher than 180,000. This makes sense that we should be able to pay tuition for our daughter/sons with that income.

For 2022, we are now at THREE college tuitions for our boys (they are close in age). So does that change our eligibility? How is a family with 185,000 income supposed to pay 3 college tuitions and not receive any credit at all? 

Now my boys all work and have filled out their tax returns; apparently they are also ineligible for any of the credits due to the 50% dependent costs rule. We pay over half of their living expenses.

Is there any loophole for parents with multiple students where the 180k income threshold is raised? Thanks for your help!

Signed,

Broke in Charlotte

[DanaB27]

No, unfortunately, a Modified Adjusted Gross Income (MAGI) over 180k will disqualify you from the education credits.

Please see What education tax credits are available? for additional details.

[Hal_Al]

Not much. 

If the student actually has a tax liability, there is a provision to allow him to claim a non-refundable tuition credit. But then the parent must forgo claiming the student as a dependent, and the $500 other dependent credit.  The student must still indicate that he can be claimed as a dependent, on his return. This is worth up to $2500 (AOTC shifts to all non refundable).