Q. If I am a full time student and my parents provided 50% of my support but didn't claim me as a dependent, am I eligible for the American Opportunity Credit (AOC)?
A. Simple answer: No. But, maybe. See below*.
Q. The turbo tax question says "can you be claimed as a dependent on someone else's return. I answered yes because I can be claimed. Should I have answered no, since I wasn't claimed?
A. No. After you answer that question yes, you'll get a drop down that asks if you will actually be claimed. Answer that question no. That will allow you to claim the non-refundable portion of the AOC.
*While technically there is a provision that allows you to claim a tuition credit, from a practical matter it seldom works out. A student, under age 24, is only eligible for the refundable portion of the American Opportunity Credit if he/she supports himself by working . She cannot be supporting herself on student loans & grants and 529 plans and parental support. It is usually best if the parent claims that credit.
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 (AOC shifts to all non refundable), if you have that much tax liability.
