24 yo daughter not eligible for an lifetime learning credit

[BeenThereDoneThat17]

A 24 year old "kid" that made more ~$4,200 (actually, $11,500) in 2023 has effectively aged out of being their parents tax dependent, but at least the kid started a real job by October 2023 after graduating with a Masters in August.   Kid (Dad, really) does the 1040 as "single" on TurboTax claiming 1 as the kid.  Dad already claimed the Amer. Oppty Credit for 4 years in the past.   Spent about $4,500 in tuition and books in 2023.  Turbo Tax says:

"You can't claim an education tax break.  Based on what you've entered so far you are not eligible for an education credit.  Here is why you may not qualify: 1. Somebody else can claim you as a dependent on their return  2. There is no taxable income in your return 3. There were no net qualified education expenses."

So, 1 & 3 don't apply as described above.  Does 2. apply because kid's gross income was less than $13,850?

[xmasbaby0 · Accepted solution]

The Lifetime Learning Credit is non -refundable.  It can only be used to reduce a tax liability.  And your daughter did not have enough income to have a tax liability.   Her standard deduction is $13,850.  She earned less---so all of her income is already "tax free."   And ----since you cannot claim her as a dependent now, you cannot use the credit on your return.

[Hal_Al]

Q. Does 2. (There is no taxable income in your return) apply because kid's gross income was less than $13,850?

A. Yes.

[BeenThereDoneThat17]

Thanks to xmasbaby0 for holding my hand and confirming my suspicions.  I told my kid they were in a tax "donut hole" since she made too much to be a tax dependent and too little to get credit on tuition costs 😉

[BeenThereDoneThat17]

Hal_Al, I appreciate the succinct answer from another level 15, thanks!