1098T Question

[kronk]

I am unable to claim my son as a dependent this year as he is only a part time student, is over 19 years old, and made more than $5050 in 2024. I have a few questions regarding his 1098T form.

1098T

Box 1: $12,278  (parents paid tuition)

Box 5: $1,000  (scholarship)

Box 8: checked, half-time student

Question #1: Just to double check, since I can't claim my son as a dependent, I cannot include the 1098T on my taxes, correct?

Question #2: If I include the 1098T on my son's taxes, he is eligible for the American Opportunity Tax Credit. However, he only had $51 withheld in taxes for 2024. Including the 1098T on his taxes gives him a $1,051 refund. Is this correct or am I missing something? Getting a refund larger than the amount withheld seems odd. Thanks.

[Hal_Al]

Q. 1: Just to double check, since I can't claim my son as a dependent, I cannot include the 1098T on my taxes, correct?

A.1: Correct.

Q2:Including the 1098T on his taxes gives him a $1,051 refund. Is this correct or am I missing something? Getting a refund larger than the amount withheld seems odd. 

A2: That is correct. The American Opportunity Credit (AOC) is 40% "refundable", meaning you get even if you do not have a calculated tax liability.  What he doesn't get is the other 60% of the AOC ($1500). 

If he had gone to school full time, or earned less than $5050, so he could be your dependent, you woulda got the full $2500 (depending on your income). 

[MindyB]

Here are the answers to your questions:

1. Correct.  You cannot claim the education credits for him as he is not a dependent.

2.  That's right.  The American Opportunity Tax Credit is partially refundable, up to $1,000.  That amount, coupled with his withholdings makes up the refund. See: IRS Education Credit FAQs

[kronk]

Thanks for the information! It is greatly appreciated!