I claim my daughter who is college-can i use her tuition as an expense?

ek9416 · ‎May 31, 2019

Hal_Al · ‎May 31, 2019

Yes. The tuition credit goes with the student's exemption (dependency). So, if you are claiming her s a dependent you will claim the education credit, even if she, or another family member, is paying the tuition. You may count tuition paid with student loans. You may not, generally, count tuition paid with tax free scholarships*.

* There is a tax “loophole” available. The student reports all his scholarship, up to the amount needed to claim the American opportunity credit, as income on his/her return. That way, the parents can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship. You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.

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Hal_Al · ‎May 31, 2019

Yes. The tuition credit goes with the student's exemption (dependency). So, if you are claiming her s a dependent you will claim the education credit, even if she, or another family member, is paying the tuition. You may count tuition paid with student loans. You may not, generally, count tuition paid with tax free scholarships*.

* There is a tax “loophole” available. The student reports all his scholarship, up to the amount needed to claim the American opportunity credit, as income on his/her return. That way, the parents can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship. You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.